Wow, it's pretty shocking that even Larry has such a clear bias against white players. I mean, doesn't he understand the irony and hypocrisy of his taking offense to being guarded by a white guy?
Larry is right, though. Young white Americans lack a star role model in the NBA, and star role models inspire kids to pursue the dream of playing in the NBA. The closest you get, I guess, is Steve Nash, but he's not technically American. There's also Dirk Nowitzki, but he is European. Young black Americans have Michael Jordan, and they've had him for a long time. I imagine that a lot of young black kids want to be "like Mike." It used to be that young white Americans had Larry Bird, but now he's faded from the consciousness of most younger fans and players (largely because of MJ - the same thing has happened to Magic Johnson and plenty of other pre-MJ stars).
Until there's a guy in the NBA who can be to young NBA fans what Tom Brady, Peyton Manning, and Drew Brees are to young NFL fans, there won't be as many young white Americans trying to become great basketball players.
Personally I disagree with the idea that blacks are the greatest athletes in the world and it's their inherent athleticism that gets them into the NBA.
I think a big part of it is socio-economic and cultural issues. Another part of it, I think, is that ethnically height is a factor - there aren't a whole lot of really tall white Americans (though there are plenty of tall white Europeans). You can find great white American athletes in any number of sports (Michael Phelps for example), they just don't often have body types which are conducive to basketball. Or, at least, they are more conducive to the sport they play. Overseas the biggest sport competing with basketball is probably soccer, but in soccer it's difficult to play if you're really, really tall (besides goalie). Which might be why very tall European players turn to basketball instead.