Warning: Tales of Symphonia spoilers.
In the lands of Middle Earth, Frodo carried his ring, pondering of many things: The dark lord Sauron who even now rose from the shadows, his hands reaching across the lands to try and find him, the ringbearer, and take the ring from him; the white wizard, Saruman, and his army of followers, trained in the ways of warfare to bring the world a new king; his friends, separated from him, their fates unknown and in question; and the whether or not humans are prejudiced against elves and whether all humanity should die because of it.
Huh? What? He didn't worry about the last one? Why not? Well, it wasn't the focus of the story. It wouldn't have really added much there. What about for a subplot? Well, it's just not nearly as interesting and anyway, it puts a lot of work on the author. Either way, we'd blink at Frodo worrying about such with all the things on his plate. It's not easy to cover a topic like that and the poor handling of it can really wreck a game.
In the lands of Teth'alla, Genis follows his dear friend Lloyd, pondering of many things: his village, where his kindness to an old human resulted in his banishment alongside his friends; his friend Colette, who had lost all of her humanity in the quest to save their world; the dire fate awaiting both worlds as they continued to fight for a dwindling and insufficient amount of mana; oh and whether he's persecuted for being a half-elf.
One of these things is not like the other. One of these things just doesn't belong. The attempt to give Genis, and the half-elves, extra depth through adding in persecution complexes and the like failed from a few different angles and remains one of the major blemishes on an otherwise very enjoyable gaming experience. Let's get this straight off, the main theme for Tales of Symphonia is not racism. At best, it's a subplot to a greater epic. But it's also a subplot that doesn't belong as something to be 'tackled' in such a story.
The first angle from which racism failed in Tales of Symphonia was that of tackling the issue. Racism, when it exists, is generally of a subtle and pervasive nature. Sure, there are often blatant signs and acts of racism, but in showing racism, it has to be considered that these acts are not viewed as wrong by the people who are doing it. It's not viewed as unnatural, strange, or being intolerant. When you go to tackle it, it's not something that you can make a deep consideration on directly. But that's exactly what the Tales of Symphonia did. Throughout it, there was an active goal to address racism and show people that it was bad and evil and stupid; through caricature, of course. It doesn't work that way though. Taking such and placing it in an otherwise well told story ensures that the overall effect comes off as cheap and underwhelming.
The second angle from which they failed was knowing about it. I wouldn't dream about writing about racism as a primary topic without taking some time to go to somewhere where it's still a prevalent problem and absorb how people act and think in such an environment. It's a paradigm shift taking it from an environment where folks generally are more concerned with what you're wearing, how much money you have, or how hip you are versus whether you're black or Chinese or Hindu. The racism tones didn't work because, for the large part, they were simple spikes of 'racist issues' among complete neutrality to the issue. Neither the elves, nor the humans, nor the half-elves ever really come across as fitting into it. The half-elves, rather than being this outnumbered and overpowered race kept in captivity with angry escapee communities are, for the large part, free, having of their own armies and capable of splitting the world in two. The humans, excepting the ones in captivity or in direct war, don't act hateful towards them. On Teth'alla there's barely a quip about it outside of the brief blast of 'they have no rights'. It's pretty much left hanging. The characters inside the party pretty much shrug and don't care about it. The ones outside the party never comment about elves traveling with the party. There's no subtle tone of it. It simply appears and disappears as is convenient.
A third angle is something a bit harder to deal with in a game, and often casually ignored, but the game also failed from considering how to build an effectively plausible history for it. Their concept was that on two separate worlds there is extremely strong racism between half-elves and humans. In the beginning, they set this up well. The half-elves, after all, are super beings with armies and slave camps and a tendency to come and dictate the existence of humans at will. Them viewing humans as rodents? That works with the setup nicely. The humans viewing the half-elves with hate and fear and cowardice? Sure, makes plenty of sense. Genis and Raine masquerading as true elves to avoid this? Sure, it works, though it would've worked better if there was even a single colony of real elves on the entire planet. Then it starts falling apart. Genis feeling more connection to a random half-elf than the friends he was raised with for over a decade? Um? Him feeling persecuted? That's not really evidenced in their home at all. Quite the contrary, they were treated as important people in the town. And let's not get started on how to effectively backtrack floating cities and civilization of armies of half-elves which tend to rule nearly unchallenged with half elf heroes that are being slaughtered by humans. All in all, they wanted certain things and they didn't consider how to flesh these upwards from some history cohesively.
But a lot of games have this problem. Their worlds are often inconsistent. What brought it to the fore? It was the attempt to tackle 'deep issues'. It was the attempt to be more serious in the delivery that brought notice to the parts that were just clumsily tossed together. Why was it so clumsy? I think a lot of it had to do with deciding to tackle such. Yes, it also made it more noticeable, but in trying to tackle stuff beyond the scope of the adventure, they overstretched themselves. In trying to tackle a deep issue like that, they neglected that it has to be taken seriously and can't just be tacked on and have to be worked up through the roots whether it's racism, war, love, etc.