Yes, it would be even better if DF would take size into consideration and group races. It works fine with the standard (i.e. unmodded) dwarves, elves, and goblins, as they're exactly the same size, but it gets messy when you have partially overlapping size ranges, so it might be tricky to implement (as well as to display). Of course, DF could go in the opposite direction and make clothes race specific (bean pole even clothes wouldn't be able to house the broad dwarven torso, while, dwarven clothing would be like sacks covering only the top of the elven trunks) or even caste specific for species with radically differently sized castes (like e.g. queen/warror/worker, ... ants).
The difference between materials and races is that unavailable materials are actually unavailable, so the production orders will fail, while while races not present just means you currently have no users for those items in the fortress (all elephant men are out on a raid, for instance [although I hope that will change eventually so they will still remain tied to the fortress, rather than losing all possessions when away temporarily]).
A possibility with a single race menu would be to list the present races at the top with a divider between them and the rest (retaining the civ race as the top one).
I know the Manager is deficient when it comes to many things (such as race, quality, and wear for clothing armor alone), and I don't use it (although someone managed to find a case where it actually would be useful for me). When it's overhauled (which would be a much larger task than some minor UI modification), that ought to be addressed, together with the ability to brew specific kinds of booze based on their inputs, issue shearing orders based on the actual availability of creatures ready to be sheared, etc. That monster pile of work has no chance to fit within the Premium release schedule, though.
I currently mostly work around the race issue by having a clothier of each relevant race and set the clothier workshop profiles to dedicate each shop to each clothier (or set of clothiers), allowing me to just give standard "make dress R" etc. orders.