I believe the Khajit arent allowed in cities because Elswyr is part of the Aldmeri Dominion .How do you think a caravan of Bretons would be recieved in Summerset?
The Argonians live outside the walls because themselves and the Dumner are having issues atm and the Dumner were there first.
The dunmer are stuck in the grey quarter because they seem to expect somebody else to solve their problems for them.Mer up grab a sword and take back Morrowind if Skyrim is so inhospitable.From what I understand the Hist lickers arent colonizing what they took they seem to just be standing around.
Retaking Morrowind is not an option for the dunmer. Their culture, their cities and the very land was destroyed following the collapse of the Tribunal and the erruption of Red Mountain. Many of their most prolific guilds, including the Morag Tong, disbanded before the Argonians even thought to invade. They have no influence as Imperials or as denizens of Skyrim and no where to declare their own. No one seems to help them and those that can, do help themselves but they do face an awful lot of opposition when this would be the perfect time so secure the support of what's left of the Houses and the race as a whole.
I guess you could make a karmic argument that they got what they deserved considering dunmer attitudes in Morrowind seemed... rather nationalistic (to say nothing of the slave trade). Now they're getting a taste of their own medicine, but I don't think that 'more prejudice' is the answer to 'past prejudice'.
Many Nords, Ulfric included, do display racist attitudes. Even the 'neutral' Jarl of Whiterun refuses to deal at all with Hammerfell soldiers searching for a fugitive. The soldiers in question are
not part of the Empire
or the Dominion. The Imperials are the only ones who seem generally moderate in this respect and their Nordic supporters tend to be amongst the most accepting nords you meet.
On a larger scale, ceding Skyrim isolates High Rock and makes it far, far harder to defend and co-ordinate attacks involving Imperial provinces. An independent Skyrim with Ulfric as High King would not jump in to defend High Rock (or Hammerfell) from the Thalmor unless Skyrim itself was directly threatened too. This is absolutely fantastic news for the Thalmor, who desire little more than the division of the races of men and would be able to pick them off one by one rather than face a revitalised Empire of any sort. It may indeed be true that the Empire and the Thalmor have ambassadors who can roam throughout the provinces but it is also a certainty that the Thalmor will attack the Empire again at some point and the worst thing for Skyrim, independent or not, would be for the Thalmor to conquer Cyrodiil and High Rock.