Having traveled a lot and especially around Thailand I can assure you that Thais are extremely racist and prejudiced bunch. This applies to whites too (no hi-so high society thai woman would liaise with a white dude), however Indians and Arabs figure on the lowest rung to them. Don't be fooled by their smiles (it's just business as usual).

That being said, you could have just complained to capitol police that your wife was abused by the staff. Other than getting the idiot deported to the stinkhole he/she came from, i'm not sure you would have achieved anything much.

PS: I recommend Item 127 on the menu - Chicken Anus