Don't elves have a visceral hatred for orcs, what with them being originally elves brutally deformed and beaten into submission by Morgoth and all that ? If anything, most elves would like you a bit more for being racist towards orcs.
I absolutely agree with you. However you could make the point, and of course I am not making that point, but one could argue that there was also some genetic engineering involved, that allegedly might have led to some qualityies that some might call a teeny tiny bit murderous.
They absolutely are people. They clearly show intelligence and sapience. They may be people with morals that are opposed to the other species and they may be at war with them, but dehumanization (depersonization?) isn't the answer.
Their entire species was created as a magical weapon. The funny thing they're really supposed to represent the cruelties of industrialization. Tolkien was not a fan of what England did with technology.
They are constructs, imitations of life, animated by the evil will of Morgoth and his foul apprentice Sauron. They're no more people than ChatGPT is people.
I can see why on the surface you might think it's a conservative meme, but it's not. It's poking fun at how rigid and yes potentially racist fantasy settings can be.
Racism is a fantastic way of introducing conflict without having to come up with a particular reason. And stories without conflict are often really boring. Comes with the bonus points of being realistic.
You're just trying too hard to justify the meme, OP's title is about cancellation, probably just copied wherever OP found the meme, and the meme itself is phrased to push the point that "woke" ruins even fantasy literature, this is a Right wing meme post.