What you said doesn't even make sense, because we are talking about something that has a whole mythology, genealogy, languages, cartography and history written for it well beyond the actual novels. This show is literally supposed to be Tolkien's work that he never wrote, according to the showrunners. This has nothing to do with anything else.
Not to mention this is the actual folkore and mythology Tolkien drew on:
https://en.wikipedia.org/wiki/Dwarf_(folklore)In Germanic folklore, including Germanic mythology, a dwarf is an entity that dwells in the mountains and in the earth. The entity is associated with wisdom, smithing, mining, and crafting. Dwarfs are sometimes described as short and ugly. However, some scholars have questioned whether this is a later development stemming from comical portrayals of the beings.[1] Dwarfs continue to be depicted in modern popular culture in various media.
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Norse mythology provides different origins for the beings, as recorded in the Poetic Edda (compiled in the 13th century from earlier traditional sources) and the Prose Edda (written by Snorri Sturluson in the 13th century). The Poetic Edda poem Völuspá details that the dwarfs were the product of the primordial blood of the being Brimir and the bones of Bláinn (generally considered to be different names for the primordial being Ymir). The Prose Edda, however, describes dwarfs as beings similar to maggots that festered in the flesh of Ymir before being gifted with reason by the gods. The Poetic Edda and Prose Edda contain over 100 dwarf names, while the Prose Edda gives the four dwarfs Norðri, Suðri, Austri and Vestri (Old Norse 'North, South, East, and West') a cosmological role: they hold up the sky. In addition, scholars have noted that the Svartálfar (Old Norse 'black elves') appear to be the same beings as dwarfs, given that both are described in the Prose Edda as the residents of Svartálfaheimr.
So the Germans were racist then?