Stereotyping and Generalizations are totally valid when referring to a group as a whole, you will see trends...people are idiots to think otherwise. However there are incorrect stereotypes and generalizations made all the time which do not reflect the majority of a group and there will be a large minority of a group that is totally opposite of those traits also...that is the problem.
Some of them have very good reasons. Take 'black' people, for instance, a lot of the stereotypes have trueness to them as during the slavery days the males and females that didn't meet the criteria the 'owner' wanted were killed like livestock. It was a terrible time and totally against humanity....but as a result the genes that make great athletes predominate in that race in america (assuming desendants from the slave periods)...so for that group you'd could say the males are bigger, stronger, faster than average and the women have bigger hips than average (big hips were thought to be the deciding factor for childbearing efficiency)...it's screwed up, but at the same time it happened. However, not all 'black' people are decendants of slaves nor even African, some islanders are 'black' and there are a few other examples of huge variations.
Now you cannot say every black male will be an athlete, nor will every black female have huge hips, but some people think they will/do/can and they make blanket statements which are incorrect.
The same thing can be said of Racial vs Racist...both are words to describe qualities based on the race of someone, which does have bearing in some cases...however the racist often uses the minority of a race to make a generalization about that race, while the racial comments are often based on the majority of the race they are describing.
The whole Asian argument is flawed as you have Japanese, Chinese, Vietnamese, Phillipino, Korean, etc and all are very different in appearance.