There still is far, far more in common than there are differences and the pygmy certainly can reproduce with non-pygmies so besides some insignificant phenotypes what's the point?
I think this highlights the point pretty well. That such a thing as "pygmy" and "non-pygmy" can be recognized. That is all.
For example in the photo at the top of this page:
http://www1.american.edu/ted/ice/images4/pygmy.jpg
I am pretty confidant that no one in the front row is Inuit, Chinese, or Danish. Different phenotypes can be observed in different regions of the globe, most of them influenced by adaptation to climate. That's what people are referring to when they refer to someone's race. That it's not important or easy to define is irrelevant. So are species, so are continents, so are breeds of dog, so is everything on Earth we apply labels to.
Also, I don't even have an idea what point you were attempting to make with the fact that the "pygmy certainly can reproduce with non-pygmies." No one at all was arguing that some people are of a different species, and of the species we've defined even some of them can reproduce.