Are you really using gameplay and user interface arguments to justify your idea that "paladin lore got diluted because more races got added"? Really?
You do know that the Death Knights of World of Warcraft have nothing to do with the units of same name from Warcraft 2 and 3, right? DKs from WC2 were orc souls bound to dead human bodies. DKs from WC3 were embittered paladins who succumbed to their dark emotions before accepting service to the Lich King. The DKs from WoW are a completely new, different breed: souls of heroes of old, who fought and perished in past wars.Because DKs were almost always portrayed as Humans in WC3 and Orcs in WC2. Expanding it beyond those two races forced Blizzard to come up with reasons why those races were DHs. Also some races simply didn't fit the class. Gnomes being a prime example.
Making a class "more distinct" has nothing to do with limiting the amount of races that could pick said class, unless race restriction is THE distinction you want for that class.When you limit the races of a class it allows Blizzard to make the class more distinct, and enhances the lore behind the class. That's my point.
You have no idea of the race's voice and animations until you get into the game.Well all of that is known at the character selection screen.