This is silly. They give the locals cheaper rates in Hawaii and Vegas and other places as well, and no one cries “RACISTS!”. You do encounter this in the civilizied world. Go get a rent quote for a holiday apartment in Capetown, then an Afrikaans friend call see how much cheaper their rate is. Ditto with Hawaii’s kamaaina rate.
All you have to do is say the magic word, and in Taiwan it is “I have an ARC”. When it comes to check-in time, you can always forget your ARC, or you left it in the car, but you have your passport.
There are a billion ways to get cheaper rates from hotels–be a student, be handicapped, be here for a conference, be a journalist or whatever. Their prices are not written in stone–haggle away. You can always get cheaper rates, but you got to do a little work.