I think a "birthsign" system would give players more choice than the racial passives. Or adding it as some mega-big CP star where you only choose one out of a few options.
Or, adding morphs to the racial passives so players have more options while retaining each race's unique bonuses. For example, argonians could choose between the healing buff or some critical chance.
Without a rework, I think some buffs to help Redguard and Wood Elf would shore up most complaints. (A DPS bonus on argonians would be nice, too.)
I don't think racial passives play big enough role to deserve a change. Sure, some are clearly better than others, but no race is unplayable. Even in high-end PvE content the race doesn't matter. If you are skilled enough to do the hardest content in the game, you are also skilled enough to cover the weak points of your race.
I would say the difference is the most notable when parsing on the trial dummy where you can get a few more % extra damage with an dark elf for example, but after all parses don't matter nearly as much as some people think they do.
Though I do think that some races could use some buffs to make them slightly move viable.