I don't think of Palpatine as being rabidly insane. If we allow for *Legends* material, Thrawn shows that he was willing to be to some extent pragmatic with aliens. Anyway, his master was a Muun.

If it wasn't a personal bias, he must have thought that the anti-alien sentiment would enhance his power. But telling the majority of the galaxy that they suck seems a poor way to gain power.

Unless all the resources he took advantage of came from people who were already anti-alien, and it was easiest to just go along?