I really think people blow this crying about Orcs out of proportion, there was NEVER an actually interesting villain in this game whose reasons of being a villain boil down only to "I'm an Orc, Goblin, Drow or other evil race". And saying a whole species is inherently evil effectively diminishes all evil they do because you are saying they never could choose not to do it, which reduces them to children who don't know better. People should move on and stop flooding my yt feed with identical videos repeating the same points.
I can see the arguments against the concept of evil races. It's intimately linked with real-world racism about "wrong" groups that "deserve" to be colonized or genocided. Writing the fictional world as being populated by distinct groups that have conflicting cultural motivations is more interesting than "this group is bad because they are bad."
But... what about demons/devils?
It's interesting, so many cultures have demons or evil spirits. And sometimes those evil spirits can be turned to good, but not usually.
I think DND mirroring culture in this way is still mostly OK, whereas culture has thankfully mostly moved on from races being good or evil.
For demons and devils, that usually goes straight into supernatural, as they're not really a race, but physical manifestations of evil energies.
At tables I've played and run in the past, 'Outsiders' (fiends, fey, celestials, etc.) embody the epitome of an ideal or motive taken to its logical extreme, for better or worse.
Take Zariel for example.
There is a bit of a distinction between each, I think. Examples below speak to mainstream D&D, where a lot of these conversations originate.
Orcs are what they are as a matter of birth. Having them be essentially evil by nature of birth draws too many parallels with real-world racism, as you mentioned.
Devils are devils as a matter of choice. Devils typically start as souls of evil mortals or corrupted celestials. But if celestials can be corrupted and become devils (e.g. Zariel), it stands to reason that devils have the potential to become redeemed—they just stop being devils at that point and become something else. So devils aren't quite a race as much as they are a culture of evil that manifests physically.
Demons are somewhat similar to devils, but most did not really have an origin point of being something before they became demons. They're just the physical manifestation of evil itself, which is why there are an infinite number of them. But even if they begin as demons, they still have sentience, so it should likewise be possible for a demon to become good, and they too would just stop being a demon.
That's actually why orcs in D&D were an evil race in the first place. At its core, D&D is derived from Lord of the Rings. Orcs in Tolkien's world were created from elves by an evil god/demigod to be his evil army. They had no choice to be good or evil in LotR so that property was inherited into D&D.
I'm okay with this change. Orcs in D&D lore have a different origin than in LotR and I don't see why they should always be evil. I consider this just one more reasonable change from the original game which had odd rules like dwarves can't be wizards and only humans could be clerics.