Right when I was despairing at the horrible English, the show went ahead and justified it perfectly. That counts as comedy gold for me right there.
In any case, this episode struck me as a very realistic take on the pervasive xenophobia you'd find in traditional Japanese society. I probably shouldn't generalize, but the trend is definitely there in both media and legislation. Such is what you'd expect from a country that treats its long-held traditions and social hierarchy with utmost care. So yes, Japan is indeed a very racist country, but let us remember that racism can be either active or passive (note: unintentional).
On Chihaya's side, this was only brushed upon, but her match-up seemed very nostalgic. It's as if it was intentionally juxtaposed with her first match with Arata, but only now she was the one in Arata's shoes. It wasn't not just his card arrangement, but also the overwhelming skill difference. But then again, it wasn't just Chihaya; this team match was meant as a trip down memory lane for everyone to see just how far they've come since they started playing Karuta, to remember the feelings they've forgotten.