The reasons are pretty simple,
#1 Humor adds to the fun for me and my group
#2 Its really hard to take a game in which middle aged men playing elf maidens roll dice, spout Python references all the while doing bookkeeping in an imaginary world that is as Ken Hite would put it
a pastiche of Fritz Leiber and Robert E. Howard adventure stories, set in a Tolkeinian world of Moorcockian morality, using Jack Vance's magic system, redacted for multiple protagonists. .
#3 Even if I can somehow get the players to be serious and me to be serious, the dice can turn any game into something more worthy of French Farce than any serious at role-playing. Sometimes it even seems like the dice conspire to do that on purpose.
Because of that I let the laughs fall where they may and if the game starts and ends serious, great. If not, thats great too as long as its fun for all.
And yes there probably are Zeetvah on Midrea. They just fit and as while I don't have the Snarfquest D20 any more certainly I'd allow them. I mean why not I have robots and every other crazy thing and it still works. Besides I like Snarf and his folks better than Halflings ;)