Why can we not get Undead or Orc Pallys?
Because Orcs and Undead are inherently evil, The Light would not grace them with its power.
We've already incorporated a lot of race/class combos that never existed from the release of the game. I think you could argue we should just make it so every race can be every class at this point, we're pretty much there, and I think you could argue that we should hang on to the few distinctions we have left.
I'll make one argument, it would be a lot of work to scale/fit each class-specific armor piece to two additional models (male/female) of a new race. Not insurmountable, but it'd be a call we'd really have to evaluate and be prepared to take on that extra work for every set that's produced. Aside from any lore-related explanations we want to keep.
Personally I think the distinction that only some races can be some classes adds a lot to the game. It makes it feel more real, even if I don't know what the lore reason is.