It's less the racism and more the outright genocidal approach that is just kind of laid out matter of factly. It's just kind of weird.
(I mean, in my current campaign the main bad guys come from what is basically a human/elven ethnostate and consider anyone who isn't a human or elf to be either useful only as slaves or as monsters to be slaughtered, but they're explicitly one of the bad guys of the setting. The elves aren't positioned that way in Spelljammer - they're just part of the setting and their genocidal actions and outright vindictiveness against the goblins and orcs is just laid out as very mater of fact. Like in one of the setting books there's one planet of orcs who are the descendants of an orcish navy that managed to stalemate the elves and force a truce, and the elves got so mad about the fact that they couldn't slaughter them all that while they gave them a homeworld and agreed to leave them alone, they made sure to pick the worst possible inhabitable world that they could find to give to those orcs. And it's called out in the text that they did it on purpose and that world is particular hellish. And there are multiple descriptions of the elves pulling a "Death Star" and literally destroying entire planets inhabited by humanoids in their desire to murder them all. But in general they're not positioned as villainous otherwise. So it's weird.)