I agree with you even though I love the concept of homeschooling and know many families who have done it. However, these families did not isolate their children from other races, religions, or cultures.
For example, one very religious family that I know who homeschooled their children was white. Many of their children's friends, however, were black or mixed-race, and they also had a few Muslim and Hindu friends. I think this type of thing is important.
As long as the children are allowed to have friends across the spectrum and are provided chances to socialize, I have seen very positive results from home-schooling.
But, as you point out, if parents use homeschooling to basically isolate their children... it's awful.