Color-blind casting is sometimes perfectly okay, and other times it can confuse the audience or change the story in ways that the playwright never intended. Its major advantage is giving opportunities to minority actors who would be seriously underemployed otherwise because of a lack of good roles. Because that is the main benefit of color-blind casting, I don't support casting white actors in roles written for people of color -- especially not, God forbid, if the white actors have to wear blackface makeup to do it. Whiteface makeup for a dark-skinned actor just doesn't have the same negative connotation that blackface makeup has for a white actor.
Even when the story assumes that a character is a certain race or ethnicity, that can often be remedied by a line or two of dialogue. For example, if a black woman is cast as Christine Daae, the exchange about the name being unusual and her being the daughter of the Swedish violinist needs only be altered to add, "Swedish? She doesn't look Swedish." "Her mother was from Africa."
There is a way to make color blind casting work EVEN when the story makes clear that the character is white: Make it clear that the character is white even if the actor isn't. Often, once again, even one line of dialogue would make it clear.
There are times when color blind casting just won't work because the audience can't suspend its disbelief that far. In the miniseries North and South, there was a character who was seven-eighths white and worried that people would find out about her black great-grandparent. Having a black woman play her would have been too darned confusing.
In short, sometimes color blind casting works, and sometimes it doesn't. Opposing it isn't necessarily racist, any more than it's height-chauvinistic to object to Danny DeVito's playing Abe Lincoln.
Audrey, the Phantom Phanatic, who nonetheless would rather be Jean Valjean, who knew how to make lemonade out of lemons.
