I dunno, I find it hard to really make sense of either of them, the stormcloaks aren't all that racist (except the dick out front of windhelm), the dark elves don't really live in slums (it's those plops banners they put up, take them down and the place is indistinguishable from the rest of windhelm) the kahjiit don't even enter cities they are allowed to enter (and even if the imperials don't outright hold anything against he khajiit they know better than to leave them unguarded) even if given a choice the argonians would probably stay near the docks anyway, and most people don't like argonians on the basis that there culture is pretty barbaric, and even elves know better than to trust elves, if the only fault of the stormcloaks is there racism than I fail to see any real problem, they just take precautions (rightfully so). and the whole "ulfric just wants power" thing is rediculous, I have never seen ulfric make a power grab, I have never seen him do anything to make it seem like all he cares about is power, sure he wants to sit on the throne (who doesn't?) but his intentions are generally admirable, not to mention that his motivations are irrelevant, the effect he has is posative either way.
than you have the imperials, they enforce their rules on people who don't need them (the stormcloak guards make this point) and they oppress the beliefs and cultures of the nords without fully understanding how deep (and why) it's like that, they are just as racist to the nords as the nords are to everybody else, the difference is that they can hide behind their laws and "justice", they also seem intent on letting the thalmor destroy them from the inside out. on the other hand there principle is true and a lot of them have a true belief that the people of tamriel need to stand under the same banner, they are at least trying to combat the thalmor, even if they suck at it, they bring good business to other places allied to them (mostly through trade and politics), and if they took a step back and stopped being so controlling you would find that they would do a world of good.
In the end the only characters I have that would go imperial is my khajiit brawler (he's crazy and loves the prestige, and stylish uniforms, it has nothing to do with racism) and my orcish warrior (he's never had any plops from the empire and owes them his livelihood, and he blames the stormcloaks for some plops that was ultimately not their fault). and in my personal opinion the stormcloaks are the best option, of they established their own rule in skyrim, returned it to nordic control and then approached the empire with a proposition of alliance than they could form a long lasting partnership that could very well rip apart the thalmor, because the empire aren't the kind to hold a grudge, and more than likely would be happy to at least attempt a resolution with skyrim, they do like their politics, and the stormcloaks ONLY issue with the empire is their control over skyrim, once they get kicked out they all of a sudden have no reason to hate each other.
Tl;dr: unless you're character has a specific reason to go empire (such as being thalmor or having had past altercations with the stormcloaks) than go stormcloak, it's ultimately the best option for skyrim AND the empire.