Splitting the different races up by species would prevent them from interbreeding, and wouldn't really accomplish anything that didn't happen in Vanilla.
The reason why civs tend to wind up homogeneous very quickly in DF is partially because DF's genetic system doesn't store any recessive traits (it doesn't blend traits together either, but that's besides the point). Civs are generated with a full spectrum of colors, but with every pairing, one genetic variant is lost completely. If a brown-eyed parent and a blue-eyed parent have a child in DF, that child will have either brown eyes or blue eyes - and the other variant will be lost from that family tree, with no chance of cropping up later as a recessive trait (like blue eyes would in real life). Over multiple generations, the chances of not winding up with everyone in a civ looking the same becomes very slim indeed. The regular goblin-induced culling of the population doesn't help either.
In real life it works somewhat differently, but not that differently. Isolated or mostly-isolated countries (roughly equivalent to entities in DF) do tend to wind up with a mostly homogeneous population over several generations, assuming that there aren't any social stigmas preventing interracial marriage (which there usually are, at least for a few generations) or frequent influxes of new immigrants to add fresh genes into the mix (which are common in the modern age of fast communication and travel, but were pretty sporadic in ancient times).
In DF there is only a small amount of immigration from one entity to another (which is fairly realistic for the time period), and no stigma against interracial marriage once it does happen (which is less realistic), so 'minorities' are rare to begin with and they become assimilated into the majority race very quickly. The chances of finding multiple colors within a civ in DF are therefore even rarer than they are in real life.
But apart from this, 'mixing bowl' nations are common today, thanks to fast communication and travel, which makes DF's homogeneous civs seem 'unrealistic' to players from these countries, even though it was closer to the norm for most of human history, except in immigrant-populated countries like the United States or Australia, or major trade-route cities like Ancient Rome.
The 'race as caste' system isn't realistic in the slightest, but if you like an ethnic rainbow in your civ, then I can't think of any better way of doing it.