Imagine being a gnome. All the other gnomes look like shit, ugliest race ever, but you also look terrible since you're a gnome too. What's the plan? Gnome women do look a bit better than gnome men, but not by much. All the sexy races like elves won't touch you with a bargepole. You might be one of those people who thinks Half-Orcs are hot as hell, but you're out of your mind if you think one of those big burly hunks or hunkesses is gonna touch your dinky little gnome junk.
The answer is that they get so full of hate that they become sociopaths. They hire human women as slaves, trophy wives or prostitutes.
But they don't love them. Love is something far from the heart of a gnome.
They view others as tools - disposable, useful - but also as objects of envy. They hate the greater races for having what they can never have - no matter how many potions or disguise spells they use to make themselves look taller or shorten their grotesquely long noses.
What could such a creature be capable of - living among the beings he hates, being given full access to their society and possessing great wealth?
I think we all know.