There are a few things on here.
He was going into this looking for racism. He was biased going in, and I'm certain he was never denying that. He's making the points to support his theory, not the counterpoints to undermine the work he's putting forth.
I certainly do NOT agree with the way he went about searching for racism in games. For instance, Kung Fu Master for NES was originally named Spartan X. Developed by Irem, a Japanese company, and based on a Jackie Chan movie called Wheels on Meals or Spartan X depending upon how you find it. Where is the racism in that? GTA, in ANY iteration, has CHARACTERS that are racist. Just as American History X has CHARACTERS that are racist, as an extreme example. Would it be looked at the same way if the main character were a different race? I haven't read his paper, but it doesn't appear that he's cited GTA:SA, and it wasn't reported as a played game for the report. Warcraft 3? I mean, come on. Where was he trying to go with that? Sure, there was "racism" in that the human race was battling the orcs, and whomever else they battled. But it's a WAR simulation. When two groups are fighting, there's going to be a defined line in who is fighting whom.
I will NOT say there is no racism involved in video games or development, as Lo Wang: Shadow Warrior is a prime example. While it was certainly tongue-in-cheek, it was still a stereotype filled attempt at keeping the Duke Nukem 3D style game alive. The developers intentions were almost certainly to shock people into playing the game. Much like the Mortal Kombat games initially shocked people with the addition of blood and homicide, which helped introduce a ratings system to video games and has also been a mainstay in mature rated games to date. Perhaps they were simply trying to relive the feel of 70's and 80's comedies which contained similar styles of humor.
A friend and I had a conversation the other day about something very similar to this, it wasn't a matter of racism in games so much as why there weren't very many ethnic or minority protagonists in games. However, there aren't very many foils who are minorities, either. So it's never been an "us" versus "them" sort of thing. I mean, I can understand making the main character white, there's a reason ethnic groups are called minorities. It's because there are less people of that particular race than there are white-europeans. So giving us a generic main character with whom people can easily identify makes sense.
I can honestly say the races in any given video game have never made a difference to me. I'm there to enjoy my experience, not analyze it. When I play games I become the main character, I don't watch him. I don't kill people based on the color of their skin, I don't fight people because I don't like their culture. I want to sit down and take myself away from the ignorance and boredom of the real world. I want an escape.
Hunting down racism where it doesn't truly exist serves no purpose other than to segregate people further. You never know when you're going to have an impact on a life. What kind of impact you have is up to you.
I'm done here. It's time to go to the gym.