I get the argument, but there's a lot with the game engine and the way gear has to be designed to show up on the character models that make this...rather complex. I'm not certain, but a part of me thinks there's likely some 1.X ghosts still floating around making it a pita as well.

You can vaguely cosplay as a Goblin or Dwarf, and some of the Beast Tribes offer outfits for their general looks, but that's probably the extent of it for the time being. You absolutely could RP as a Dwarf traveling the world if you wanted to, though the hat options are somewhat limited and sadly tied to Role/Class.