I only used Ul'Dah as an example because it's the main city that has a lot of Lalafell history. Since most of the architecture is stone, I thought it would be the place most likely to show signs of being made by smaller hands.

I definitely agree with this reasoning, and it's the same argument I often use. Making things like furniture lala sized would make them unusable for most other races, while Lalafell can still use furniture that's too large. It seems fair for everyone that way. But my friend still insists that it's racist, that there should be some furniture made to accommodate smaller guests (Kiddy tables, imo)

Of course this debate is really just for fun, there won't be anything that comes of it. I just thought it would be interesting if anyone had noticed funny scenes, npc quotes, flavour text, etc.