When I worked at TSR [he writes], there was always basically a truism in cover art--the central figure had to be a white male. Most of us actually helping to create the cover art, either by conceiving it or actually creating it, hated that kind of outlook, but the powers that be believed that our audience was entirely white males and they needed someone that they could identify with on the cover.
As he rightly notes, this was absurd for two reasons - the audience weren't all white males, and more importantly this is a game in which people pretend to be elves, dwarves and halflings. He then goes on to detail the creation of Regdar, the iconic fighter from the D&D 3e core rulebooks. Apparently at the time of conception Regdar was supposed to be a dwarf, but at the last minute, without any consultation with the writers, he was suddenly changed into a human white male by nefarious marketing types. And thus the racist undertones in D&D were perpetuated.
Let's say straight away what needs to be said: Monte Cook is being a bit disingenuous here, because despite his excuses about nonhumans being nonethnic and "just dwarves" (or elves or whatever), it's quite clear that the initial dwarf version of Regdar was going to be a white dwarf - i.e. a short, stocky, muscular bloke with a beard, but one with caucasoid features nonetheless. So Monte Cook can hardly claim to be a paragon of political correctness or racial equality. At best, he just tried to avoid the issue by making the iconic fighter a dwarf and thus sweeping all issues of race under the carpet.
That said, the whole issue of race in D&D is just about the biggest minefield for well intentioned people that you can possibly think of. Let's imagine that the 3e designers had decided to make the iconic fighter a black male; you only have to think for about five seconds before obvious nightmare accusations become apparent. The D&D designers think that black men are only suitable to be meatshields! They're just trying to throw a bone to other ethnicities! They're just pandering to the political correct lobby! And so on and so on.
I have two conflicting feelings about this. Firstly, D&D is undoubtedly at root a European fantasy game. There's nothing particularly wrong with that, given that it was written by descendants of Europeans and its setting is broadly 'medieval Europe'. In view of that, I don't really mind it being mostly about white people. People can create settings that are based on other areas of the world if they wish (and it's something I've often done in the past) in which case obviously their characters will be of other ethnicities, but in its standard form it makes sense for the art in the core rules to feature mainly white people.
But on the other hand, it is also undoubtedly the case that white people are a minority of the world's population. Now, fantasy worlds are fantasy worlds, so that shouldn't really be relevant. But I suppose there is a school of thought which says that the core rules of a role playing game should be as generic as possible, and if that is the case its art work should contain people of different ethnicities, in amounts proportionate to the populations of all the different ethnicities that exist in the world. That depends on whether or not you think D&D should have an 'implied setting' (or should just be a neutral set of rules).
At the end of the day, I suppose the "game where guys with beards pretend to be elves" point is the most telling. D&D is about make-believe. I most often make-believe that I'm a dwarf. That doesn't mean that I want to be a dwarf. Equally, if I play a blond Teutonic paragon, that doesn't mean that I'm an Aryan supremacist, and if I play a Zulu it doesn't mean I'm making a political statement about how we're all just the same underneath. All I'm doing is picking characters who seem like they are fun to play.
So while I take the point that always having human white male fighters on the covers of core books is slightly dubious, nor do I see it as a serious issue that strikes at the heart of the game. A better solution would be to just have a dragon on the front, actually. In a dungeon. That would be the most representative.
(It should be noted that the 4e PHB has a sexy woman of unknown racial origin and a Dragonborn on the cover, which if you are of a certain disposition is much worse than a white male fighter. It seems to imply that women are only allowed on covers if they're sexy, and combined with the Klingon-esque Dragonborn it states in no uncertain terms that "This is a game for adolescent boys." Luckily I'm not of that certain disposition, so I just think it's a nice picture.)