Saying that X exists does NOT mean that it will ever come up in the hands of a PC.
Taking pikes again. Pikes are sucktastic weapons for adventurers.
There are still people in the setting who use them, because 20% of the time (or 30% or whatever), they're useful.
So my philosophy is
I'm not sure why people are freaking the fuck out over all of this. If a trollgre has a -10 to Intelligence, and a player wants to play a wizard, I'm not sure how retarded he has to be to realize that it's going to fuck him in the ass for spellcasting. Level adjustment is one thing, as that's trickier for new players, but pure stat adjustments? Come on. Give the players a little credit.
Meanwhile, MOST of the time, being an elf/dwarf/anything else in the PHB should not be a disadvantage. Okay, an elf is a better archer than you. Deal. However, you're probably better with something else. So his "can contribute to the party" is not higher, particularly since he paid for that archery skill by losing out on something else equally important.
However, just because an elf is better at ONE THING IN PARTICULAR does not mean that a dwarven ranger (to repeat, dwarves as bad rangers is hypothetical.) is weaker ADVENTURER.
So yes, the elf scouts and tracks better, and shoots better, and those are big ranger things and not so big fighter things as a rule.
As for limiting certain possibilities: What if we -want- to eliminate the mad minotaur archmage?
However, nothing that is presented as playable (half-elves, I'm looking at you) should ever just suck. If a half elf is bad at one of the options, that's fine. If a half elf doesn't have anything to contribute besides suckiness, its not a playable race.
Doesn't mean that there would be no half elves, however.
Still. If it is presented as valid to be a dwarf with ranger levels or a half elf with levels in anything, there has to be SOMETHING that they get that DOES compensate for their weaknesses, whatever they are. Worse archer means something else equally important to "Adventurer" in combat. It may not be a particularly "Rangery" thing to be good at mechanics, but it ought to be something the dwarf can do well enough to compensate for not being so good at tracking and scouting.
And in a brief answer: The mechanics are only relevant to the extent they represent the setting/s. If they're not representing that elves are good archers, that minotaurs are big and tough fighters but bad wizards or whatever we want them to represent, they fail.
So all options that fail should be presented as "If you want to be challenged, you can do this. This is not advised."
Since "good with a bow" is presumably not the most important thing in the setting, elves being good there and nonelves being bad there means that nonelves are good somewhere else and elves bad somewhere else.
Not that elves > nonelves, all day, every day. If I wanted that, I'd give elves a LA and make them a nonstandard race.
Trust in the Emperor, but always check your ammunition.