Your reasoning was fine until you jumped to your "doomed forever" conclusion. Clearly nothing is doomed forever if things like killing and racism are reducing.
Your theory explains why people misunderstand each other and are "doomed" to states of conflict due to how their minds work. It needs to go further to explain how good outcomes are produced despite conflict and misunderstanding.
Why do they accept "simple and blunt rules"? Where are these rules coming from? Why aren't the rules pushing people in the opposite direction? Are there other mechanisms beyond imposing simple and blunt rules on everyone? etc etc etc Don't be satisfied with your theory. It's a good start but keep digging.