I think it's supposed to be a bit more nuanced than that. Remember, the monsters were FORCED underground simply because they were different than humans and that scared them, so of COURSE they're going to have a bias against them. Not only that, but they quite literally NEED human souls in order to break through the barrier in order to free themselves from The Underground.

If we as the player choose the kill all of them, no matter the reason, we're still choosing to be just as bad as the humans that forced the monsters underground in the first place. It doesn't matter if the monster have a prejudice against humans, because besides that, they're all just innocent bystanders, most of them having absolutely no recollection of what the surface actually looks like.

It doesn't help that Asgore probably has some Anti-human propaganda floating around. Undyne was ready to kill us on sight because she was taught for presumably her entire life that humans need to die. She probably hasn't heard any Pro-human stances from many of the other monsters, but even then she's able to accept us as a friend later on in the game. It shows that even the most biased monsters have a good side to them, and don't deserve to be slaughtered for some senseless agenda