I know it really sucks when **** like this happens, but you and I both know British people on Xbox Live act the same way towards Americans all the time. It's just a vicious circle. (not to say ALL British guys on Xbox Live are assholes, I've encountered plenty of nice British guys and even used to play with a few regularly about a year ago)
I can assure you, neither me, or any of the people I play with are racist online. I have found racist Brits, but I've talked some of them into fair fun gameplay. As long as there is competition, there will be racism/ sexism/ whatever. I don't approve, but I can't see any way to solve it. You are right, but all we can do is try to be part of the players who will still play regardless of who the opposition are. Also, if you are one of those racists, and are very nationalistic online, may I suggest turning your matchmaking selection to 'my country only'. It is scary how many people don't realise that you can do this, it is somewhat a solution to what's one of the biggest issues in matchmaking.
Only the low level MLG players do this, and seeing as how you start in a lower ranking you meet kids like that first unfortunately. Get in the mid to high 40's and that's where the skilled calm and collected "chill" players are at. They only want to do one thing, practice, play a serious game (not serious as in screaming til your throats sore pissed off serious), and have fun and get better as a player. The kids you play in the lower ranks seeing as how they are the first one's you meet are the ones that give MLG this bad "First impression" i'm afraid to say. For example, you know me Epic, i've forged with you numerous times and i've played with you just as much. I'm in the high 40's in MLG and i'm not an arse . I'm a pretty calm cool and collected individual.