I'm not sure of the the answers to your questions, actually. I'm a philosopher, not an art historian! But it just seems that people in the medieval era (and even the renaissance, for a bit -- the two can be hard to distinguish), people just didn't think about other times being different from their own.
As to why he remained Caucasian, there's probably two main reasons for this (though I'm really just pulling this out of my ass). First of all, anti-semitism, which had long been a feature of European Christianity. And second, anti-arab feeling, which was particularly strong in the 1600s, given the Turkish siege of Vienna. So people weren't really terribly eager to see their Lord and Saviour portrayed like one of the infidel invaders of Christian Europe. But again, that's just a guess.
And, of course, you don't want to discount the force of tradition, of "we've just always done it this way" either. My guess would be that the first non-white images of Christ may have been produced around the turn of the 19th century, since that's really when you get a historical consciousness in Europe, as well as a much heightened willingness to criticize tradition. But again, I'm no art historian.
My main point is just that the origins of "Christ as white" were not particularly racist, not that the continuation of such wasn't racist.
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"Die Deutschen meinen, daß die Kraft sich in Härte und Grausamkeit offenbaren müsse, sie unterwerfen sich dann gerne und mit Bewunderung:[...]. Daß es Kraft giebt in der Milde und Stille, das glauben sie nicht leicht."
"The Germans believe that power must reveal itself in hardness and cruelty and then submit themselves gladly and with admiration[...]. They do not believe readily that there is power in meekness and calm."
-- Friedrich Nietzsche
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