And I ain't talking about one racial ability, but the whole stat distribution of a race. Races should be vastly different, an High Elf shouldn't ever be as efficient barbarian as an Orc. Of course, this shouldn't mean that if your race choice isn't correct, your character would be worthless. But there should be some disadvantages and advantages of races.

I'm going to use Shadowbane's two races as examples. Dwarf & Elf, let's turn these to Orc & Dunmer:

Orc:

Granted: 45 Base Strength / 110 Max Strength
Granted: 35 Base Dexterity / 80 Max Dexterity
Granted: 60 Base Constitution / 140 Max Constitution
Granted: 30 Base Intelligence / 70 Max Intelligence
Granted: 40 Base Spirit / 100 Max Spirit

Dunmer:

Granted: 35 Base Strength / 70 Max Strength
Granted: 60 Base Dexterity / 140 Max Dexterity
Granted: 35 Base Constitution / 70 Max Constitution
Granted: 50 Base Intelligence / 120 Max Intelligence
Granted: 40 Base Spirit / 100 Max Spirit

These are the base stat distributions, now add the factor that these can go up based on gear, possible spec choices, and hopefully according to leveled stat distribution. This would mean that a Dunmer who specializes in destruction magic is by default a better mage than an orc. But who is to claim that the orc couldn't get tons of intelligence and be up to par or even better in destruction magic. However, if the two choose the exact same build, Dunmer would have roughly stated higher intelligence, but lower strength and health, same amount of magicka, (lets transform spirit -> magicka) and higher dexterity. This would give it a fine taste of balance. The orc is much more survivable, but not as agile and doesn't deal as high damage as the Dunmer. But then, the Orc could have gone cloth armor, and Dunmer heavy armor, this would put the Dunmer closer to the orcs survivability at the cost of the damage and the agility. Where as the orc could go for dunmer's less survivability with higher damage and agility. It would create a fine balance of specializations, and in the end, would offer "alternate playstyles" instead of "raw power".

I am not saying that TESO should use Shadowbanes class system, but such is a good base, something like I explained above would be close to my dreams.