I think horror in general HAS to rely in some sense on irrational fears. Whether it is fear of strangers, fear of sex, fear of failure, fear of betrayal, fear of ones own dark desires... Horror is so named because it evokes non rational responses.
Ultimately what stays with us is a sense of dread at our own insignificance.
Yet the bigotry is just a number of transient hooks for the reader to bring him into the REAL horror.
I say: Lovecraft was an awful, awful bigot, and I thank god for that.
I won’t argue with that
Using the darker side of our natures in creative ways is a lot better than ignoring them or naïvely attempting to overcome them without properly understanding them.
Incidentally, I love the etymology of the word ‘horror’ – from the Latin horrere, meaning to tremble, but coming into modern general use (apparently, but I forget the source of this info) via the word horripilation, meaning the feeling you get when something scares you in that special way that gives you goose bumps and makes your hair stand up. I always think the dawning realisation of Cthulhu Mythos horror, both for the protagonist and the reader, is a perfect definition of the word.