1) AGADAH: THE THREE CHARACTERISTICS OF THE JEWISH PEOPLE
The Gemara teaches that the Jewish people personify three attributes: they are merciful, they are bashful, and they perform acts of kindness. The MAHARAL (here and in Nesiv ha'Bushah #1) explains that the Jewish people inherited these three Midos from their forefathers, Avraham, Yitzchak, and Yakov.
The verse, "And He will give you mercy" (Devarim 13:18), teaches that the Jewish people are imbued with the Midah of Rachamim, mercifulness. Similarly, Yakov Avinu said to his sons, "May Hash-m give you mercy" (Bereishis 43:14), when he prayed that Hash-m grant his descendants mercy in the eyes of others, in return for Yakov's own exemplary Midah of Rachamim. Yakov's mercy is also demonstrated in the description of the way he tended the flocks of Lavan (Bereishis 31:38-40).
The verse, "... so that awe of Him should be upon your faces" (Shemos 20:17), teaches that the Jewish people excel in the Midah of Bushah, bashfulness. The Gemara teaches that awe of Hash-m, Yir'as Hash-m, is the source for the Midah of Bushah. Similarly, the Torah describes Yitzchak's relationship with Hash-m with the term "Pachad Yitzchak," "the fear of Yitzchak" (Bereishis 31:42), because Yitzchak personified the Midah of Yir'as Hash-m.
The verse which demonstrates that the Jewish people are Gomlei Chesed is the verse in which Hash-m praises Avraham for teaching his descendants "to do acts of kindness and justice" (Bereishis 18:19). The Torah describes some of Avraham Avinu's exemplary acts of Chesed in the beginning of Parshas Vayera.
Accordingly, the three Midos which characterize the Jewish people were inherited from the forefathers, Avraham, Yitzchak, and Yakov. (See also Insights to Beitzah 25:3.)

79b----------------------------------------79b

2) THE PROHIBITION AGAINST MARRYING "NESINIM"
OPINIONS: The Gemara concludes that the decree against marrying the Nesinim (see Background to the Daf) was comprised of three stages. In the first stage, Moshe Rabeinu prohibited his generation from marrying the Nesinim. In the second stage, Yehoshua extended the prohibition for as long as the Beis ha'Mikdash stands. In the third stage, David ha'Melech extended the prohibition to apply even in the absence of the Beis ha'Mikdash.
The Gemara relates that the Beis Din in the generation of Rebbi sought to allow the Nesinim to become part of the Jewish people. Rebbi vetoed the proposal on the grounds that the Nesinim work as servants for the Mizbe'ach (for they were appointed to be woodchoppers and water-drawers to supply the needs for the sacrificial service on the Mizbe'ach; see Yehoshua 9:3-27), and Beis Din is not authorized to abolish the Mizbe'ach's benefit from the Nesinim.
The Gemara does not explain the exact nature of the Gezeirah enacted against the Nesinim. Was it a Gezeirah of Avdus (servitude) which required that they must be servants, or was it a Gezeirah of Isur (prohibition) which excluded them from marrying into the Jewish people?
The Gemara gives two contradictory inferences. The Gemara states that Moshe Rabeinu and Yehoshua enacted Gezeiros against the Nesinim, but the verses relate only that they designated them as servants but not that they specifically prohibited the Nesinim from marrying Jews. Also, the Gemara relates that Rebbi did not want to permit the Nesinim because they are the property of the Mizbe'ach which Beis Din is not entitled to take away.
That the Gezeirah was one of servitude is also supported from the fact that in the days of Rebbi, the Beis Din wanted to permit them on the basis of the principle of "Hefker Beis Din Hefker," as RASHI writes. They did not seek to revoke a decree of an earlier generation (which a later Beis Din is not authorized to do unless it is greater than the original Beis Din). This implies that the primary Gezeirah was that they were designated as servants; the prohibition against marrying Jews was merely a secondary result of their status as servants.
However, other sources indicate that the primary Gezeirah was not one of servitude, but a prohibition against marrying Jews. The Mishnah in Kesuvos (29a) teaches that when a Nesinah is raped, the perpetrator is required to pay the Torah-prescribed penalty, but when a Shifchah (maidservant) is raped, the perpetrator is not required to pay (even if she was a Besulah at the time of the rape, as Tosfos cites in the name of the Yerushalmi). This indicates that a Nesinah does not have the status of a Shifchah, and no decree was issued to designate the Nesinim as servants. The Gezeirah only prohibits them from marrying into the Jewish nation.
How are these contradictory sources to be reconciled?
(a) TOSFOS (DH Nesinim) cites some who suggest that Moshe Rabeinu and Yehoshua enacted a decree of Avdus for the Nesinim, but their decree applied only while the Beis ha'Mikdash stood. David ha'Melech's decree applied after the Beis ha'Mikdash was destroyed, but it did not involve servitude. Rather, he prohibited the Nesinim from marrying Jews because they demonstrated corrupt character traits.
According to this explanation, why did Rebbi state that Beis Din cannot permit the Nesinim because of the "Chelek ha'Mizbe'ach," if today the decree is not one of Avdus but solely a prohibition against marrying them?
Apparently, Rebbi's intention was to say that when the Beis ha'Mikdash will be rebuilt, Yehoshua's Gezeirah of Avdus will take effect again and the Nesinim will be obligated to serve the Mizbe'ach. If Beis Din permits them now to marry into the Jewish nation, when the Beis ha'Mikdash will be rebuilt there will be no way to identify the Nesinim who are supposed to be servants of the Beis ha'Mikdash.
According to this explanation, why did the Beis Din in the times of Rebbi propose to repeal David ha'Melech's Gezeirah? His Gezeirah prohibited the Nesinim from marrying Jews and was not a Gezeirah of Avdus. The Gemara (Beitzah 5a) teaches that a later Beis Din may not revoke a decree enacted by an earlier Beis Din unless the later Beis Din is greater than the earlier one in wisdom and in numbers.
Perhaps the Beis Din sought to repeal David ha'Melech's decree because the nature of the Nesinim had changed and they no longer demonstrated corrupt character traits. Some Rishonim maintain that when the reason behind an earlier prohibition no longer exists or applies, a later Beis Din may revoke the decree even though it is not greater in wisdom and numbers (see Insights to Beitzah 5:2).
According to this explanation, however, the Gemara's question (79a) is a weak one. The Gemara asks that it was Moshe Rabeinu who enacted the Gezeirah against the Nesinim, and not David ha'Melech. The Gemara should answer simply that Moshe Rabeinu enacted a Gezeirah of Avdus and David ha'Melech enacted a Gezeirah against marrying the Nesinim.
(b) Tosfos cites another explanation which asserts that all three enactments (of Moshe Rabeinu, Yehoshua, and David ha'Melech) were Gezeiros only of servitude. However, the Nesinim obviously were not given the status of bona fide slaves, as is evident from the Mishnah in Kesuvos (29a). (The RASHBA writes that they indeed were given the status of bona fide slaves, but since they had no specific master the normal laws which prohibit slaves to marry ordinary Jews did not apply to them.) However, since the decree required that they be limited to menial labor (like ordinary slaves), it was appropriate to prohibit them from marrying into the Jewish people, just as real slaves are prohibited from marrying into the Jewish people.
This approach explains why the Gemara finds it necessary only to prove that Moshe Rabeinu decreed that they be servants, but not that he instituted an enactment against marrying them. This also explains why the Beis Din in the times of Rebbi proposed allowing Jews to marry them. The prohibition against marry the Nesinim was merely a result of the fact that they were made into servants. Once they no longer have the status of servants (because of "Hefker Beis Din Hefker"), there is no prohibition against marrying them.
According to both of these approaches, it is clear that the prohibition of "Lo Sischaten Bam" (Devarim 7:3) does not apply to Nesinim. This supports the view of the BA'AL HA'ME'OR (76a) who points out that the Gemara here apparently contradicts the conclusion of the Gemara earlier (76a) that the prohibition of "Lo Sischaten Bam" applies to Nesinim. The Gemara here sides with the opinion that "Lo Sischaten Bam" applies to a Nochri from the seven Canaanite nations only before he converts, but not after he converts. Accordingly, it does not apply to Nesinim, who are converts. (See Insights to Yevamos 76:2.)
Alternatively, only the first generation of converts from the seven nations are prohibited, but their children are permitted. Hence, today's Nesinim are permitted even if the prohibition of "Lo Sischaten Bam" applies to a member of the seven nations after he converts (RAMBAN, RITVA).
Rashi favors this ruling in a number of places (Yevamos 37a, DH Nesini; Kesuvos 29a, DH Nesinah; see also Rashi to Yevamos 70a, DH Mishum Rabeinu, and Menachos 43a, DH Mishum Zonah). Rashi writes that the prohibition against marrying the Nesinim is unrelated to the Isur d'Oraisa of "Lo Sischaten Bam." (When Rashi earlier in Yevamos (37a) writes that the Nesinim have "a type of Avdus," he likely refers to the second explanation of Tosfos, that the Chachamim enacted an Isur d'Rabanan against marrying them because of their pseudo-state of Avdus.)
(c) Tosfos cites a third explanation in the name of RABEINU TAM. Rabeinu Tam asserts that the Gemara here is consistent with the conclusion of the Gemara earlier (76a) that the Nesinim are Asur mid'Oraisa because of "Lo Sischaten Bam." The discussion of Gezeiros in the Gemara here involves only the Gezeiros of Avdus, and not of the Isur of Chasnus. Even when the Beis Din in the days of Rebbi sought to permit the Nesinim, it sought only to remove their state of Avdus; the Beis Din did not attempt to remove the Isur mid'Oraisa against marrying Nesinim. Rebbi protested that their Avdus should not be removed, lest the people forget that the Nesinim have an obligation of Avdus to the Mizbe'ach when the Beis ha'Mikdash is rebuilt.
According to this explanation, it is clear why the principle of "Hefker Beis Din Hefker" would have been able to remove the prohibition; the Beis Din sought only to remove the Gezeirah of Avdus. (Even according to Rabeinu Tam, the Nesinim were not true servants but only pseudo-servants, and they were not prohibited to marry into the Jewish people because they were servants, as is evident from the Mishnah in Kesuvos.)
RASHI follows this opinion in a number of places (Yevamos 49a, DH ul'Rebbi Sima'i; 68a, DH Kuti v'Nasin; Sotah 44a, DH ked'Rabah; Makos 13b, DH Nesinah; see also Rashi to Sanhedrin 82a, DH Ovedes Kochavim). (Rashi in those places apparently contradicts what he writes in the places cited above, end of (b). This matter needs further elucidation.)