RebYidd – I could not agree more strongly that all people have the right to be respected as such. Jewish or not, all people are created in Hashem’s image. I have written many times in the CR to protect and defend this very Jewish perspective.
I do want to point out, however, that for many people it is natural to identify more closely with another Jew than with others. Our common identity as Jews creates a unique bond that traverses all other borders. Additionally, nearly all Jews are actually direct relatives within, say, ten generations or so. In a community that is so conscious of its heritage, this is not considered a distant connection.
Of course, regardless of identity, I would never treat another person in a demeaning way, let alone tell her to do something beneath human dignity. Nevertheless, I would feel uncomfortable having a relative work as my cleaning help, and it is understandable to have a similar sentiment towards all Jews, who are, after all, family.