I don't see anything innately wrong with a human who can breathe fire, or has wings, or a dwarf with four arms, so long as you're willing to RP it. It does seem silly to say that no, it's actually against the rules, your dwarf can't learn magic.
It shouldn't limit you from using magic, and it doesn't, and that is good.
But, sometimes you will want to do things other than just casting spells (especially if you have run out of spells or if there is anti-magic preventing casting spells), so you can decide if you want to be good at one thing, or good at other things too but perhaps not as much.
But it does limit how good you can be at magic since you can't get as high magic stat, hence lesser wizard.
Are they archetypes for builds? Why are they archetypes for builds? Is it problematic if they are archetypes for builds? Are they just flavor for settings and character backgrounds and other storytelling needs? Should they be? Why have "races" at all and not just "backgrounds"?
It's an interesting ongoing debate.