It could be an easy way to balance a character if they choose to play as a different race, making it so they gain special abilities but will find it harder to either interact with or influence members of other races.

I could see it being useful if, for instance, a player chose to be an elf and they managed to get to an elf run country, since they'd have a 'racial bonus' for dealing with the natives, but if they ended up in, again for instance, an orc land they may find themselves getting attacked all the time due to a 'racial hatred' between the different cultures.

And that's before considering the language barrier.