That's one way to take it.
Alternatively, trading off the idea that they are dexterous and graceful, we could give them a racial bonus to reflex saves, possibly even an enhancement line: 2 AP for +1, 4 points for +2, 6 points for +3.
If you ask what the main problem of having an elf is, people will reflexively reply "hit points." This adjustment doesn't alter their actual hit points, but addresses the fundamental issue of survivability by making them slightly more likely to save for reduced damage in big raid fights with lots of area damage being splashed around. Furthermore, unlike weapon finesse, which would be useless to a pure ranged or caster build, reflex saves would benefit all characters.
Basically elves have a major weakness that is their glaring issue, and while we shouldn't take that away, we can mitigate it in certain circumstances to try to make them viable choices.