I think we're talking about different periods within the 60s. The first half of the 60s was one thing and the second was something different. The racial ingredient was indeed present in the US, especially in the early/mid 60s but by the end of the decade black music was permeating heavily the white scene. Funk and soul rapidly garnered white audiences and much more so did disco later in the mid 70s. The controversy about Dylan going electric was also the early 60s and so was the Ray Charles episode about "perverting white youth" with his music. Elvis dissed because of playing black music was even before. Hendrix attacked by blacks was indeed in the mid/late 60s, but this had to do with a different agenda.
I used Elvis as an eample because from 59 - 68 he was forced to make bland sappy stuff. Hendrix' first appearance the USA is 1967, Dylan going Electric is 1965.
Nonetheless, the repression was real and it affected artist such as Hendrix. Granted, while Elvis was forced to tone down his act, Jimi was expected to overdo things and put on silly shows, beacuse that's partly why he got famous. But the idea is the same: commercial and social forces defining the artist.
The opposing bands which got into fights, the motivation of which certainly included musical band loyalties, like the British mods and rockers and the hyped Beatles vs. Rolling Stones "controversy" you mention were well over by the mid/late 60s when the hippie culture started to dominate the scene. By this time, which is the 60s I was referring to in reply to a post mentioning The Beatles doing Revolution 9 and For The Benefit Of Mr. Kite (1968 and 1967 respectively), there seemed to be a better predisposition in general to different kinds of music. Festivals like Woodstock or Isle of Wight prove it.
As for the other things you've mentioned I think you have a very idyllic idea of the 60s. Not only did that only last 1,5-2 yrs tops in the USA (Montery - Woodstock) But it ended violently at Altamont in 1969. How's that for Hippies getting along just fine?
The almost gang-like culture associated with music didn't stop with mods and rockers, it continued with genres as diverse as Ska, Punk, Heavy metal. Real rockers hated Disco (we sometimes say Eddie van Halen saved us from the clutches of Disco) yet the band that discovered Van Halen (Kiss) managed to make a hard rock/Disco crossover song. As with psychedelic rock, some of those genres (punk, metal) briefly got popular with the general public (which dilutes the genre setting off the purists) People are as possessive now as they were then, once they associate themselves with a genre.
Also very few of those late 60s festivals actually featured black artists, usually not more than one: Jimi (and in his wake Buddy Miles and Buddy Rich), Little Richard, who was already well established and Otis Redding. All of them played music that fitted in easily Folk (-rock), Country (-rock), Blues (-rock) and Psychedelic rock, with some hints of Soul. Those are not examples of particular musical diversity at those festivals, in fact some bands such as the Jimi Hendrix Experience, The Band or the Doors, produced music across all of those genres and more (Jazz/Fusion, Ethnic Music) and some found their niche linking genres (Santana)
Sly is the odd one out (although not by much), but indeed Sly only came at the very end, with several hits just before Woodstock (1969). His first three albums (67-68) sold poorly. I would also argue that, while black arists from Berry to Jimi, BB and Albert King, Little Richard had a large effect on "white" rock, Sly did not have an immediate impact.
Musically I don't see that as anything special, there are always going to be artists that can make it work, breaking down barriers and crossing genres, innovating and trying to keep people guessing (Elvis, Jimi, Sly, Led Zep, Living Colour)
There was a very brief period in which some more openess was apparent, but it didn't last. We only percieve this as such, because the period was very influential in social-political terms, Revolts and riots in Europe, USA riots, Vietnam, Prague Spring, RFK, not to mention LBJ's "Great Society" legislation (65-69) The main reason behind that musical diversity however is not the social background, but simple commercial considerations. Had it been profitable Dylan would've played Woodstock as would Led Zep and Cream would've played Monterey.
I can hardly imagine a festival these days encompassing on the same date artists as diverse as Sly and The Family Stone, Santana, Janis Joplin and The Who without the whole thing getting out of hand.
There are plenty of current festivals that program as diverse as that, for example Bospop in the Netherlands. Last year their bill included are range of artists from Santana to Opeth, Neil Young to The Bangles (yes they do still perform), ZZ Top to Apocalyptica, Steve Lukather to Crowded House.
Bospop - Wikipedia
It is an incridibly friendly festival, but completely devoid of any hippy connotations.
...but we are getting a bit off-topic...
I hope people realise that when U2 started they could'n be put in a box either, their concerts were reviewed as "melodic heavy metal" while they were opening for pure Punk bands (whose audience couldn't stand them)
I don't think anybody (especially not U2) could've anticipated them performing and recording with the likes of Dylan, BBKing, Johnny Cash, Robbie Robertson or Keith Richards, certainly not with Luciano Pavarotti or Frank Sinatra.
So if one talks about U2 playing it safe, what exactly does that mean? Is that going back to Eno in stead of Rubin? Is playing it safe releasing a single with Green Day or MJBlige?
I like to see them take risks, whether that is AB, Pop or Passengers; UABRS, R&H or U2-3D. But I do think they have to live up to certain standards. This is why I don't get Elvis Presly and America. Especially not, when you consider three sunrises, love comes tumbling or even boomerang being available.
The same goes for some songs on ATYCLB, if Stateless was indeed lying around!