I think you're right that Odin is definitely caught up in his own prejudice and assumptions, but he's also in a position to know better in ways that the rest of Asgardian society isn't, and he does pay at least lip service to wanting peace with these people, which is a strange thing to think if he only sees them as monsters. Also, I don't think people necessarily have to remain trapped in their privileges and prejudices, and it should have been Odin's job to educate himself, particularly if he was going to raise a Jotun child.

And yes, it's true the Jotnar aren't blameless either although I could easily see a reading where the whole giants-attacking-Midgard is largely Asgardian propaganda, because let's face it it definitely sounds like a classic bit of propaganda, but even so they're clearly under the boot of Asgard, which...doesn't excuse them, but does lend a different understanding the the situation, especially in terms of colonized mindsets.

I think I would like movie!Odin better if the movie itself had made it clearer that he was flawed, rather than seemingly trying to unironically portray him as a wise and just king. I tend to like flawed characters, when their flaws are acknowledged (as Loki's and Thor's were). Odin never got his moment of truth - he just went into Convenient Odinsleep to avoid it.

(LOL baby klepto Odin. He's all, "Ooh, a baby eight-legged horse, MINE! A baby zombie - the perfect threshold guardian for my new underworld! A baby wolf that I will keep as a pet until it grows so big that I get freaked out and chain it up!" And so on. Lulz.)