They need to rebalance the racial passives and make the worse ones better to stop people having to play certain races just to compete.
This right here. I think having racial passives in this game is what makes it unique compared to other MMO's. It adds another layer to the dynamic combat system. I disagree with getting rid of racial passives. This is an Elder scrolls game after all. If you don't feel as "1337" because you didn't choose the "right" race based on what everyone else chose, well you do have 6 other slots to create a character.
In short, keep racial passives, just buff the other lackluster ones *cough argonian cough*