David Bernstein has an eminently reasonable take on private-sector anti-discrimination law over at Cato Unbound. Excerpt:
[T]o say the least, segregation and exclusion of African Americans in public places in the South wasn’t entirely a voluntary choice of business owners. Jim Crow segregation involved the equivalent of a white supremacist cartel. The cartel was enforced not just by overt government regulation like segregation laws, but also by the implicit threat of private violence and extra-legal harassment of anyone who challenged the racist status quo. This violence and extra-legal harassment was often undertaken with the approval of local officials; the latter, in fact, were often the perpetrators.
To break the southern Jim Crow cartel there were two options: (1) a federal law invalidating Jim Crow laws, along with a massive federal takeover of local government to prevent violence and threats against, and extralegal harassment of, those who chose to integrate; or (2) a federal law banning discrimination by private parties, so that threats of violence and harassment would generally be met with an appeal to the potential victim’s obligation to obey federal law. The former option was arguably more appealing from a libertarian perspective, but it was completely impractical.