How does it make you feel to know that:

The cannonical race for each Hero is the race of the games setting

The Nereverine was a Dark Elf
The CoC was an Imperial
The Dragonborn was a Nord

TES Heroes aren't just prisoners, they are Prisoners (a title)

A man or woman that has seen beyond the bars of fate, shackling them to a destiny, and the knowledge and ability to break free of this cell. Once freed, they are the only ones with a truly open destiny.

the fluff is literally constructed in such a way that ANYTHING is plausible

You could say the same for dovahkiin being an argonian.

I don't really think Nords have too much of a problem with Argonians, the dock situation is actually done on the suggestion of Captain Lonely-Gale because he's worried about a race war breaking out between them and the Dunmer living in the Grey Quarter.