Updating the old races will make them FEEL like new. It's not just the models, the animations and even the textures on those models are going to be updated (perhaps even the armor updated to fit them). A new race might be an attractive idea for some people, but many prefer to play the ones we currently have, and they are in dire need of sprucing up.
Also, nothing says they can't be working on these updates AND add a new race (it's likely they might focus more on the updates, though, since they have been heavily requested).