The SRD says that Charisma “measures a character’s force of personality, persuasiveness, personal magnetism, ability to lead, and physical attractiveness.” However, it goes on to say “This ability represents actual strength of personality, not merely how one is perceived by others in a social setting.” (emphasis mine)
Why then are dwarves, half-orcs and myriad monsters shackled with Charisma penalties?
Force of Personality: One can hardly argue that traditional dwarves, especially, are lacking in this department. They are a driven race, hardly something that begets weak personalities.
Persuasiveness: Every race responds differently to different forms of persuasion. A human might find a smooth tongue or a warm personality persuasive, but a tiefling might respond better to a swift kick in the pants. Amongst humans, the tiefling might not be very persuasive, but when interactive with others of his kind, the human might be at a disadvantage.
Personal Magnetism and Ability to Lead: This translates into a penalty to the character’s Leadership score. Why would a dwarf make a poor leader? I’m sure there are races (the draw come to mind) where a penalty might be applicable, even amongst their own kind. But to have a blanket reduction makes no sense.
Physical Attractiveness: I’m ignoring this, as I do in game play, since it just makes no sense.
Things get worse when you consider Charisma’s effect on sorcery, a cleric’s ability to turn undead. It comes down to this–Charisma affects too many aspects of a character’s abilities. It needs to be retooled.