"Can only speculate on the mental gymnastics behind this but apparently, for WotC the very concept of a Half-Blood (no matter if there are made-up fantasy races involved or not, looks like it's all the same to them) is potentially so offensive that they rather get rid of it than accept it as a normal occurrence of and in both real and virtual life.
You know, just as anyone sane and with common sense would do."

Now that I've gone over it again, the mention of mental gymnastics highlights how I was connecting the last part to the wrong option. By "standing by my reading", I mean the way I read it is equally valid sentence structure. Thanks for helping me see it properly.

I really doubt that matters much to overall sales. It's a very small number of people who would care, and most of those would buy a new DnD product either way probably.

Now that we know more thanks to Cadaver, I think adding biracial as basically a trait to your race choice is a pretty neat way of doing it. They'd still be the only RPG system I know of that does such a thing.

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It's all good.....your sarcasm detector just was a bit off when you read that post.
Such things happens to even the most observational of us from time to time :)

Yeah, that's another option. Just invent a new name for all the half-bloods.

Pixie could always (well, at least in 3.5 and Pathfinder 1E) have an offspring with a dragon - half-dragon was a template which can be applied to any living corporeal creature. Same thing for half-celestial and half-fiend template. After I re-read those rules first thing which came to mind was making a half-celestial Star Spawn of Cthulhu for the lulz.