He also doesn't let the "scale-backs" into the city
Because the Dunmer and the Argonians would kill eachother. Freewinter gives you the same reasoning when he
refuses to let the Argonians in.
and makes the "grey-skins" live in the slums with no protection from his guards.
He doesn't make them live there. His father gave them free room and board - no taxes, no payment, no military requirement. Windhelm is the oldest human city in the known world. Its walls have never been expanded.
It was also the capital of Skyrim. That means that nords were forced out of their homes to give Dunmer a place to live. The Grey Quarter is protected b guards, so you're lying there. Guards patrol that sector and when I kill Dark Elves, I'm thrown in prison.
Also consider that the Dark Elves made their mess and they're crying to the guy who gave them free housing (You don't even get free housing and you're the Dragonborn and his second right hand man if you go Stormcloak.)
Now consider the Elves get all this for free and whine about it,
while there are nord beggars living without homes in one of the coldest cities in Skyrim.Everything Ulfric does screams racist [censored] lol
Not really. Ulfric has no racist lines in the game, save for those aimed at Elenwyn and the Aldmeri Dominion.