It occurs to me as I sit here somewhat stoned on a fresh pair of Vicadin (see sciatica) that sub-races are a sort of over-applied byzantine flourish to the fantasy mythology of Dungeons & Dragons and its offspring. Until someone more knowledgeable puts forth a better theory I'm pinning this development squarely on Prof Tolkien.
But backing up a moment -- What is a sub-race?
Backing up slightly further -- What is the significance of the term race within the the D&D mythos?
The answer to the latter question, as I understand it anyway, is that a race is a discrete unit of intelligent creatures. Typically members of a race are capable of breeding and producing viable offspring. Races are necessarily living things.
[I've always wanted to get my hands on a monster book that pondered these sorts of basic principles and organized the entries according to type: Animals, Races, The Undead (include lycanthropes here), Spirits (include magical beasts, demons, fairies, etc). Didn't Dave "Arduin" Hargrave do it that way?]
Sub-races are various flavors within a Race. Ideally the contrast between the subs is very high. The peril here being what I would call the "High Elf/Grey Elf" scenario, where the difference between the two peoples is subtle (low contrast). Same goes for Hill Dwarf/Mountain Dwarf. Because D&D is in practice basically an oral game (don't take that the wrong way, dear reader) it behooves the wise DM to emulate the tall styles of traditional storytellers and paint his/her settings and set pieces as larger-than-life and wildly varied. Two neighboring kingdoms that share a common culture and associated customs, that speak the same language and worship the same gods are simply less interesting than two neighboring kingdoms that differ drastically in these respects. Differences are the seeds for potential conflicts, and conflict is the life-blood of the D&D game.
And so it goes for sub-races. The mythopoeic distance between the Drow and the Wood Elf is fertile for conflict, whereas the High and the Grey come up short in my estimation. Their physical and social similarities make the space between them fuzzy and uncertain. Fuzziness is not what the DM wants his carefully chosen descriptors to project to his players. We want that mental picture to be in HD. We want the situation on the ground-floor of the campaign to be easily grasped by the players so that they can begin to navigate it (read: be immersed in it) ASAP.
As an aside, this is why super-detailed, Silmarillion-like world backgrounds tickle my groan reflex. When that initial picture of the world that the player is supposed to become familiar is so vast and convoluted that it takes more than three pages to convey an alarm should go off in the DM's mind. Complex settings can make great literature, but great D&D games (at least in my experience) grow from fairly simple beginnings. The classic example being the town <--> dungeon campaign model.
So the moral here -- if this tangent really requires one at all -- is to emphasize the differences between sub-races in your campaign world because (a) it makes them more memorable as individual types and as a unit and (b) it opens up conflicts to be explored and resolved.