According to Blizzard it’s not.
I think I’d be okay with in-game racism as long as the character being racist is portrayed as a villain, blatantly dumb/ignorant, or has had a deeply negative personnel experience with the group they’re being racist towards. I admit all but the first can be tricky to pull off right.
“We will surely destroy those filthy pinkskins, For The Horde, am I right comrades!?” the orc warrior bellowed.
“Uh, I beg your pardon?” said the very pink Blood Elf mage standing next to him.
Standing on the other side of the Blood elf from the orc, a tauren peered at the line of Alliance soldiers and started pointing them out. “So, that human, then that other human, but not those brownish ones, and like every two out of three dwarves. Oh, and a couple of those night elves, but not most of them, because they’re too dark a shade of lavender. In my opinion anyway.”
Hate can have an organic place in a setting and can be done correctly. It would be weird if there was a lack of hatred especially towards the Horde after all that they have done.
Imagine being an old veteran of Stormwind or a survivor of the Draenei who has witnessed so many horrors of the Horde and not having at least a little hate in your heart.
I would also actually like more flaws in Warcraft’s characters.
Skincolor being the defining feature of racial identity never made any sense in WoW and was probably added to make for easier emotional parallels to real life racism.
The pejorative for Orcs used to be “blackbloods” but they changed it in Warcraft 3 I think
Like there are a billion more obvious things that make a human and an orc physically distinct before you get to skin color
Last time I recall it being used in-game was one of Daelin’s emotes (“Death to the Blackbloods!”) during the final Founding of Durotar mission in TFT.