Why is it racism to generalize about a race but people here can discriminate vs an entire region?

It's called regionalism and it's just not considered as bad to make stereotypical remarks about an area and its people as it is to single out individuals for condemnation by generalization. I'm as guilty of it as anyone. I grew up hearing all kinds of nasty stories from relatives who'd traveled through the South. I heard really bad stories from a good friend about her (white) preacher grandfather's attempts to integrate his Baptist church in Texas. I know some good, very decent, kind Southerners and have friends who've moved to the South and love it but it's really hard for me to shake the idea that native-born and raised southern whites are nothing but toothless, lazy, illiterate bigots in sheets whose idea of a good time is an after-church, community picnic with lynchings. Mea culpa!