I'm of two minds (at least) on Elves.
On the one hand, they're a classic part of nearly every fantasy setting. They're expected, or perhaps even demanded. Unless you go specifically looking for something without them (hello Talislanta!) you're going to find Elves as part of any fantasy or fantasy-based setting that exists. They may be called something else - in Warhammer, for example, I believe they're called Eldar. They may look slightly different. The basics will be there though: pointy ears, unfathomable beauty, long-lived, usually closely tied to nature, somewhat reclusive, and always advanced in magic (or in some rare cases, technology) beyond Humanity. They're Better Than You, in every way. (DANGER WILL ROBINSON, DANGER! TVTROPES LINK! DANGER, DANGER!)
And if you're not sure if that was supposed to be the good hand or the bad hand, welcome to my boat.
Despite my highly Elf-hostile attitude 90% of the time, I really do want to like Elves. Nearly every setting gives them interesting, complex, and involved histories. Reading about Elves, you can usually get a pretty good impression of them as old, ancient in some cases, and with all the old shames, mistakes, and failures that would be necessary for a civilization that has existed for all that immense amount of time. Their eons of past are checkered with intrigue, warfare, betrayals, and more. Things that should, on the whole, make them an immensely interesting race and, under normal circumstances, increase their allure from a player's standpoint.
The problem is also wrapped up in their age. They're old - and their mistakes are either long-forgotten to all except their inner circles, or so old that they're unknown to the other, younger races. And they're good at hiding their flaws, in some (or dare I say, most) cases too good. Nobody else knows about their screw-ups, their ineptitudes, their dramatic failures; they're all too well-covered up or just happened too long ago. Thus the rest of the world sees them as just shy of perfection. Flawless, beautiful, nigh-immortal. Everything every other race can do, they can do better, between longer experience, superior skill, or greater magic. And when there's something they can't beat another race at - like in most fantastical settings, advanced technology - they still manage to make other races look and feel inadequate by somehow turning their cultural delay into a blessing. "Look at us," they say, "we might not be better than you at that stuff, but that's just because we don't want to be. We don't need that stuff. We're better without it. You just need it because you can't keep up with us without it."
And perhaps if it was just that, I could live with it. I'd love a world where the Elves (or another race) acted like that, and the rest of the world responded as one would expect that level of arrogance to receive - disregard, dislike, and/or laughing it off as a pathetic excuse for not being able to keep up with modern invention. But that's never what happens. With usually a very small handful of exceptions (almost universally Dwarves, given the all-too-common Elf/Dwarf rivalries in most settings), everyone else on the large scale buys into the Elf propaganda, believing they're absolutely right about them being better. In nearly every setting, Elves are portrayed as what almost every other race (again, with the near-universal exception of Dwarves and Orcs) wants to be. The epitome of the ideal, perfection or as close as a mortal or semi-mortal creature can get.
Combine all that with players and GMs who also buy into the propaganda, stir in a bit of OOC troubles with said players/GMs, and really it's not all that surprising that nine times out of ten, I hate Elves.
Honestly, I didn't use to hate Elves. When I first started playing Neverwinter Nights, my introduction to D&D and through it Pathfinder, Elves were "just another option" for character creation. I've played all of the core races at least once in NWN, and the only one I can think of never playing twice was Gnome. (Thankfully, Pathfinder's Gnomes have thoroughly changed that; if only the character model for NWN Gnomes could be redone in Pathfinder style, that would be pretty awesome. But we'll get to them in time.) But the canonicity of the first NWN server I played on was always a bit loose, and intentionally so. It was set in Forgotten Realms, as were all the NWN servers I played on over the ... good grief, ten or eleven years now, depending on when you consider me to have stopped playing the game ... since I was introduced to it; however, the RDR was only loosely so, and the players and staff there were happy to play a bit fast and loose with some of the setting rules, and more importantly the community there were a bit more mature than those of other servers I encountered later on.
My problems with Elves really started on Myth Drannor, the fourth or fifth server I played on. Compared to the servers I'd played on previously, MD was incredibly strict and hard about trying to enforce canon adherence. It was the first server I played on that policed clerics at all; on the RDR, Sojourney, and other servers I'd played on previously, it was fairly common for cleric players to invent their own mystery cults, alternate sects of canon religions, and such like, and no one really payed heavy attention to whether or not a cleric's domains matched up to those the books assigned to the deity in question; on MD, however, all of that was very heavily documented, policed, and watched. Myself and my closest gaming friend EbonFyre/Belladonna had created a Chaos cult in our days on the RDR - the eventual predecessor to the idea of Xaos specifically and the other Aspects in general - and we had to severely rewrite that mythology and the idea of the cult before MD's staff would even consider allowing it. It worked out positively, in the end, and eventually spawned the idea of a single deific entity providing power to a set of lesser representatives that each stood for a small, more focused segment of its domain; however, it was at the time immensely frustrating.
"What does that have to do with Elves?!" I can already hear you saying. Pardon my ramble, but I am getting to it.
MD was the first place I really encountered Smug Elves. I didn't really see a whole lot of Elves around, as I never played an Elf character there and thus wasn't in on the joke, but when my characters (a Human and a Tiefling, plus a handful of others that were unimportant) did encounter an Elf (that wasn't a Drow), the interactions were always dismissive, condescending, and/or insulting. The Elves were special, they were better than everyone else, and it seemed to be their purpose and place in the world to be secretive and snub everyone they encountered who wasn't an Elf.
I'm sure there are Elf-fans who are already itching to scream out, "But not all Elves are like that!" or "That doesn't mean that's the canon way Elves are to be played!" Which I'm sure, on at least some level, is true. But it was a very strong impression to give someone like me who was getting their first real heavy-canon experience there. It colored my perception of FR Elves very strongly. I played Elves from time to time still - not on MD but on its sister/child server Cormyr/Dalelands - but they were always outcasts or dissidents of some sort. Most were what Paizo now calls "Forlorn Elves" - Elves raised among Humans or other shorter-lived species, severed from Elven culture and society. And most of them, not at all surprisingly, were usually not fond of their "normal" kindred.
When CD broke off from MD, the Snob Elves were not among the majority of those players and GMs who left with us. And, for a time, there really weren't any on CD. There was a stereotypical Elven Village In The Woods, and most of the Elf PCs on the server were usually either from there or headed there, rather than Arabel where the server was centered. That, unfortunately, eventually changed. There were two groups of Elf players who were mostly behind this.
The first was a group I've ranted about before, but then it was about their GMing. Nearly this entire group became GMs very shortly after arriving on the server and making themselves fairly well-known; I think I was not playing or otherwise distracted at the time, as I remember them being GMs but I don't remember them being appointed or going through their GM apprenticeships. Might have been when I was on one of my WoW stints. Anyway, this is the group I ranted about back in the Humans post: the ones who could kill most racial applications through sheer numbers (there were about seven or eight of them, on a GM/Admin staff of 12-15 at most times) on the excuses of "I don't think _____ should be allowed as a playable race" and "I think we have enough/too many ______ on the server already, so further applications should be ignored/refused on principle". Combine that with not being fond of their actual GMing, it's not hard to see why these people got under my skin; their playing style, however, was equally irksome to me. And wouldn't you know it - while they all had multiple characters, their primary/main characters, who they played the most and who most players associated them most strongly with, were a group of Smug Elves. Very superior, very self-aggrandizing, very condescending to non-Elves, and all in all a rather irritating, unpleasant group to be around unless you happened to be their friend... which usually seemed to require having a Smug Elf character of your own to buddy around with them.
They eventually left, though some came back from time to time. The second group was smaller and more recent, and included a special type of Smarm Elf that I had encountered before but never had to deal with much personally before now: the Kill-All-Humans Elf. This is the Snob Elf that takes Elven Snobbery to the logical conclusion: if Elves are better than everything else, then Everything Else is by necessity making things worse for Elves; it's better if we just kill them off. It's for the Greater Good. That player/character's companions weren't as bad, and when they were encountered on their own they were usually a lot more tolerable, but when That One Elf was around it made the entire group incredibly unpleasant to be around. It didn't help that I didn't much like the player themselves for various reasons.
So yeah. While it's likely that bad players (or just players who I personally didn't get along with) are mostly to blame, I've had a lot of bad experience with Elves, and it's strongly tainted my perception of the race. Which led to a lot of headaches and personal frustrations with trying to develop a niche for them in Finiens. I didn't want to throw them out completely - like I said at the very beginning, before I started ranting, I like the basic concept of Elves, I like the history most settings give them, and I don't want to alienate players who do want to play an Elf. At the same time, I wanted to avoid having the Smug Elf become a common character archetype in the world. I wanted to kill it dead, if I could, and it seemed the best way to do that would be to preemptively kill the Elven supremacy mindset in the process of worldbuilding.
So I made them a broken people. I gave them more than a tragic past - I made their tragic past still collapsing around them. The Elves are not only not immortal (despite living longer than all but one of the rest of the races on the planet) but they're watching as their once-immortal society decays around them, wondering "Where did we go wrong?" And the thing is, they probably know what: while the average Elf on the street/tree/sand dune/frozen plain/whatever doesn't, the remaining tuatha likely know the secret and guard it jealously, dreading the day the rest of the world finds out what forced them out of FaeReie - what made them mortal. In the meantime they as a people stumble along, searching (thus far in vain) for a way to seize back their immortality, or staving off the loss of yet one more of their dwindling numbers of immortal elders. The Elves have no reason to be superior or condescending to other races. They're a race in their twilight years, and even the lowliest Elf knows their people are in decline, while every race around them - from the industrious Kobolds to the nomadic Leoni to the boisterous Orcs to the myriad Humans to even the sinister Yuan-Ti - is only beginning their ascent.
So they're doing the next best thing: playing their part as an elder, mentor, and observer, doing what they can to guide the other races along and point them in the right way, sharing some of their long-held wisdom in hopes that their successors will do better than they. Sometimes this comes in the form of simple advice, guidance, suggestions, and directions. Sometimes it's more hostile, with direct commands - which often get refused or resented - or even warfare. And with the separation of their cultures and their ensuing adaptations, even the Elves as a whole no longer have a unified view of the best way to go about this. Some of them have even abandoned the idea of serving as mentors, either to fight in one way or another to regain their exalted status, or simply struggling to survive, to last as long as possible before dwindling to nothing.
I think this presentation of Elves manages to keep both sides of the pro/anti-Elf argument happy. The race is clearly no longer a font of Smug, Smarmy Better-Than-Thous, though I've no doubt that there's character concepts who could make use of that archetype. (I imagine some of the remaining tuatha could justifiably pull of a Smug Elf characterization and feel perfectly legitimate in their arrogance, but most PCs won't be playing tuatha, due to their superior statistics requiring a level adjustment or some other compensation.) The race clearly has visible, apparent flaws that are not lost to the abyss of history - the other races are well aware of the Elves' crumbling society, and while the specifics of their secrets may be unknown there's no surprise in their seclusion and faltering numbers, even with the bolstering of their strange hybrid offspring, which might do them better if they weren't rejected as often as they are accepted. At the same time, though, the Elves are clearly here, they match up with most expectations of Elven culture and society, and they are not so broken a race as to make them without hope or the potential for a revival in the future.
Who knows? Maybe the restoration of the Elves and tuatha to something resembling their prime might be on the schedule some time in the future.