Agreed, I have no idea why racial/cultural homogeneity is an argument against public services. It has always seemed to me to be a roundabout way of saying “We can’t do it in the US because minorities would ruin it”
While I can see why you'd suspect the term might be used as a dogwhistle, I can see why honogenity might be an advantage here.
It's a country with very few different people and viewpoints because there's not that many people to form groups. While I certainly would never see a lack of diversity as a general goal for a country, fewer viewpoints to consider significantly reduce the amount of time it takes to get stuff done in governments. The fewer ideals you need to consider, the shorter the debates can be.
A country built up out of immigrants like the USA bring a plethora of viewpoints and cultures, all living inside one general government. This is a valuable source of cultural development and progress but the more groups you have within your borders, the more chances of friction you get and the longer politics should take; there are just more factors to take into account, and that's not necessarily a bad thing.
It's not a dog whistle - it's a description of the effects of racism. Areas with homogenous populations consistently have more political support for providing social services. This is because most people have greater empathy for those that look like and act like them. There are examples of this from Japan to Finland to Utah. A significant minority population exposes the racists within a country.
Isn't the whole point of a racist dog whistle that the only people who can hear it are racists. If you are hearing dog whistles everywhere, maybe you're the dog.