I remember those! They were pretty fun.
I don't think anyone IC really believes in the elven thing, my char uses it as a soft insult of the bastards that invade peaceful south. "Those damn elves", "their elven decadence" etc.
A lot of Dubhaine history is intermingled with the elves and the family predilection for picking handsome, anonymous warriors to father their bloodthirsty daughters means there's a trace of elven blood running through later generations. With the latest generation there's even a marriage to one of Erik's many bastard daughters which is a nod to my respect for (and loathing in equal measure
) the old Silver Dragon.
It doesn't matter if the Elves are a separate race or not, they're so deeply embedded in the psyche of EC at this point that erasing them would improve little and make the continent a less colourful place.