To be fair, you did show them a big bag of candy, and then tell them they couldn't have any.
Let them create ludicrously optimized races with lots of points. Play it for a while and see how it goes. Set campaign on easy mode and let them stomp everything.
When you grow bored with this, design a powerful encounter that will kill all the characters, like 48 level 1 wizards all casting a single magic missile (that's 168 damage per round) as a CR 10 encounter. Have them all spread out in a large area, so melee guys can only kill one per round.
Then have a generous druid come by and cast reincarnate on each of them. Have them roll randomly for a mundane race that they come back as.
That is literally the worst idea in this thread.
Well, that may be. It is difficult to determine all the dynamics of the situation given the limited information, and to formulate the best solution that will work for these individuals. Ultimately, the original poster will decide what to do. This was just a suggestion, and sometimes I do make ludicrously bad suggestions, but then they can still be helpful because it causes one to think about what makes a good or bad solution.
And yes, Obscuring Mist for the win, but not everyone will think of that, be able to cast it, and win initiative.
A number of odd races have collected in my game world over nigh four decades, and with the 3.0 revision, a number have become possible as PC races. Several were created long ago with the resignation that they were unplayable. As time and lots of work passed, the ARG and others of its ilk have allowed some of these 'npc only' races have become possible.
I am currently trying to upgrade a race of pseudo-octopi that a player worked up in 1976 or 1977. Somewhere, I have or had his drawings on the skeletal structure.
I share your pain, somewhat - I'm playing in a few online games, and literally everyone is a something-or-other-blooded Aasimar. No race-builder races, but aasimar are annoying enough to me.
You made a few mistakes though - you basically gave your players a "make your own super-focused race that excels at whatever class you want" system, and then let them have at it without any input from you, from the sound of it.
The better way to go would have been to either, right out the book, say homebrew races would not be permitted, or to develop them at the table, at the time, so everyone could figure out how these would fit in with your game world, each other, etc.
This is how my first pathfinder campaign ended up with an undead minotaur race, midget centaurs, Hopi samurai rabbits, and sea kobolds. All of which sound pretty silly phrased like that, but were tailored by the entire group, with GM input, to fit the world he had going.
What I would recommend, now that the cat is out of the bag so to speak, is compromise. You've stated you won't have fun running the AP you have planned with these races - and they've said they really want to play those races. So what you do? Offer to run this AP for them with the standard races, and one session a month (or whatever, depending on your scheduling - frequent, but not constant) round-robin GM responsibilities for this new bunch of homebrew freaks. You run a session, the guy to your left runs a session, etc. If it works out, blend those races into your AP game, and allow them same-level rerolls if they MUST have those races.