I am going to be respectful dissenter here. I still have my copies of the Chronicles of Narnia. They were given to me when I was a child back in the late 1970s by parents who never read any books but simply heard "oh, kids like these" so they gave them to me. I devoured them and loved them.
However, here is my point as a dissenter here. Even though I was a little girl, I "got it" that they were doing a Christ analogy with the Lion and I just rolled my eyes at that. I also saw and recognized the racism just screaming off the page, oh yes, I got that. I recognized that all of the Calormen schtick (the name itself fer cryin out loud!) was racist gobbledegook. I saw that clear as day. And again I rolled my eyes. Even though a kid, I recognized it for what it was: A story written in a particular time and place by a white Christian author living in a society that was racist and took for granted the supremacy of Christianity. I also got a kick out of the Queen, thought Lucy kicked ass, and I wanted to travel on the Dawn Treader, and talkin animals were awesome!
My meandering point is this: Kids are smarter than anyone gives them credit for. Sometimes racist BS wrapped in over-the-top Christian supremacy can be instructive to a child that racism is BS and Christian supremacy gets downright silly (a lion fer cryin out loud?).
Kids today more than ever should be reading the Chronicles of Narnia. Then sit down with 'em and have a chat with 'em about what they saw in the books and what they think. Kids will surprise ya. I think they are generally far better at spotting and calling bullshit bullshit than many an adult is. Beyond that, though, they will probably tell you they sure wish they had a talking horse, and I do too.
I loved (and still love) the Chronicles the Narnia. I went on to college and eagerly took elective classes on Middle East history and Islamic culture.
Keep the Chronicles of Narnia on the shelves. I don't discard ANY books, because even the most obviously racist ones have value that is more complex than the words on the page. After all, that Calormen BS led me down a path of a lifelong fascination with learning more (facts) about worlds, cultures, and religions other than my own. You might not have predicted that, which is exactly my point. Keep books. All books.