And the people living there are every other other race (hell, even Dunmer - the most, universal despise race). The first taste of racism I experienced was from Faendal (riverwood is pretty nice - for a Nord village). If I said that, in a modern context about....Inuits...people would look at me, that's racist.
If it's thievery with the Khajit, why aren't the Bosmer denigrated? There's a book about merchants where it says even Bosmer and Khajit storekeepers don't trust Bosmer and Khajit customers, respectfully. Is it something else? What happens during these moon sugar rushes? Do they go butt wild and bring out the claws and attack anyone and everybody willy-nilly?