I'm not denying that in some areas racism is still alive an well, so that begs the question what purpose does the heavy regulation serve if it didn't eliminate the problem?
In a deregulated society you'd still have those same people acting as horribly as they do now, heck a few might join them. But the majority would support business that was in line with modern viewpoint, inclusive establishments. You can't legislate or regulate away prejudices, so why set a standard that allows a federal politician to decide how you'll run your business?
Also keep in mind I only oppose discrimination laws at the FEDERAL level, if individual States or Communities want to say to be on our town, our state, our county you have to abide by these rules than so be it.
Do you think the 13th Amendment outlawing slavery was a good idea, or would you leave that up to the states, too?