Nords have always struck me as a real-world Scandinavian-like people, and like the Vikings of olde, I don't see what Ulfric or Galmor is doing is at all racist in any way. It is purely a matter of physical superiority. Skyrim is an extremely harsh and unforgiving mother, so a certain strength of body and soul is expected by the Nords of anyone who enters the fatherland.
And quite like the Vikings, it doesn't seem to matter who or what you are, but how strong you are. If a man fought for his family, killing tens of Vikings by himself, the marauders would spare the man's family and offer him a place on their ships and a cut of the loot.
The Mer tend to be less physically powerful, and therefore less respected, but not shunned or discouraged from entry. They just get flak for being weak whiners...
But as Lachdonin stated, if your using racsim alone to choose your side (unless, perhaps, your playing a Dunmer) your missing the point of the war.
How the hell is it anything
but racism? The Hlaalu, he comments constantly on how the best way to earn the Nords respect is through hard work. He farms in a frozen wasteland just so he can survive, and he still isn't strong enough for the Nords? Really? I guess he has to grow a few feet and stop wearing a shirt then, huh? In fact, what Dunmer in Windhelm
don't work hard for a living? Sure, taking care of the Corner Club isn't exactly back breaking work, but according to many Nords, the drinks are much better there than at the Candlehearth Inn. Why isn't it more popular? Becasue the Nords are too proud to drink with the lowly Dunmer. That Altmer woman comments that the Dunmer don't understand how things really are, what the hell is she talking about? They all work for an honest living like the rest of the people of Windhelm (save for those two beggars, who, next to Ulfric, are the biggest biggots around). Its racism.
Of course, the Dunmer are incredibly racist themselves, or, more so they were. I've yet to see a single Dunmer in Skyrim comment on being of superiour stock, other than that guy who wrote that book, who, by the way, isn't even living in Windhelm anymore. Scratch that, the Dunmer were never racist. They just hated everybody, including eachother. That's why we all like them, their misanthropes. There is a very strong Dunmer in The Companions, he is an expert with a blade. Is he still to weak for Skyrim?
The vast majority of Stormcloaks are arrogant asswipes, there is no line of reasoning to work around that. And, if what you say is correct, and the Dunmer are just whining, I guess the only way to prove their worth is to slaughter every Nord they come into contact with then? Good, I'll get right on that, then. Because if the Dunmer were really tough, they would take action and exterminate the Nords! That's the Skyrim way! KILL THE PIG! BASH ITS SKULL! KILL THE PIG! CUT ITS THROAT! KILL THE PIG! BASH ITS SKULL! KILL THE PIG! CUT ITS THROAT!