Well removing races because of the lore doesn't make much sense to me. From a campaign perspective it does, but when I play singleplayer and multiplayer I guess I expect it to be "it's own game", it doesn't have to connect with the game's lore specifically. Maybe I should explain what I mean...
When people play other strategy games, such as Sid Meier's Civilization they get into situations that make no sense from a realism perspective. You'll have a situation where the Aztecs invade and conquer the Japanese, then the Babylonians and Americans see that the Aztecs are too strong so they ally together and start a war against the Aztecs to bring a balance to power.
It doesn't matter that the Aztecs, Americans and Babylonians all lived in completely different time periods and had no contact with each other. It doesn't bother people, even people with a background in history like my dad who's actually a historian. People enjoy the game for what it is and every match is a "new world" with it's own history and events.
So if the devs say the Korx and Arceans are basically wiped out, then fine, don't put them in the campaign. But does that mean that they shouldn't be available to play in normal matches? I don't think so. Just like with the other strategy games the game is telling a new story, with new events in a new galaxy. It's not telling a "historic" story, it's telling an alternative history in which anything can happen.
Likewise, with custom races the official lore is set aside for the sake of making the "random matches" more interesting.
To me every match is it's own match. Trying to make it fit together with the campaign waters things down, imho. I enjoy playing the campaign and "random matches" as two different entities.
On that front I've also noticed a few other things that have broken immersion for me.
When I start a game of Galactic Civilizations 3 I don't know what's outside of my star-system and barely have hyperdrives, my race is just colonising a second world in their home system and reaching out to the universe beyond... again It's a new story, a new galaxy.
Then I get an anomaly in which I find a ship left over from the Dread Lord Wars. And I'm like, "What? If this is supposed to be connected to the Dread Lord Wars then why, as the Terrans, do I have to recolonize Mars again from scratch and relearn how to make sparrow missiles and ion engines?" It doesn't make any sense. If we're restarting from the beginning of the tech tree, then the whole match should be a "fresh start" and, imho, the races that went extinct in the campaign have just as much of a right to be there.
The ship that I find in the anomaly shouldn't be from an event that will break the game's history. It shouldn't say there's two derelict vessels, one Drengin and one Human that were fighting because I'm playing as the humans and I don't have guns yet and haven't even met the Drengin, let alone fought them. Instead it should just say that there's two ancient vessels from a long forgotten war. It makes the game a lot more cohesive.
So if the races that are either now extinct or lost in obscurity don't make it into the game for launch, I'm fine with that. The devs need to work on the races which are assets for telling the official campaign's story. Likewise with expansion packs they should focus on races and things which have something to do with the story.
With DLC on the other hand, I'd really like to see a line of "Lost Civilizations" releases.
You could have:
Lost Civilization: The Torians
Lost Civilization: The Arceans
Lost Civilization: The Korx
Lost Civilization: The Xendar
etc.
Anyways, that's my opinion.