Interesting and thought-provoking OP. However, I always thought that
the best of D&D's "mythology" (and by that term, I mean the trappings of the world, society, races, magic, gods and monsters) has always been shameless ripped off from other fantasy sources. Tolkien's races. Vance's Magic. Moorcock's Alignment. Merlinesque wizards next to Leiberian thieves, next to Howardesque barbarians facing monsters from Greek myth, Norse epics, and Lovecraftian nightmares.
was the game's greatest strength. Even you say it is the "best" of D&D's "mythology".
I'm with RC on this one. D&D is at it's greatest when it can ride the coattails of a million and one other motifs, throw them together, stir them up, and see what comes out. To take the dryad from Greek myth and make it useful in a game with medieval knights and cthonian monsters and pokemon trainers (for instance) would be a WONDERFUL use of the D&D game, and comes to reflect most astutely the reason I grew to love the game in the first place. With this game and my friends, I could tell ANY story.
Getting rid of those things means that D&D has to stand on it's own creative legs.
And if those creative legs are compound words and twig-monsters, they are weak, fragile little things that will quickly break under the stress of the burdens it tries to bear.
That could be okay -- WotC might be interested in giving us a different style of crutch every year. But I'd like a game that can stand on it's own, first.
Or, to phrase it in slightly more acute terms, defining it's own mythology gets in the way of me, as a DM, defining
my mythology. If the rules' goal is to serve the DM, but they're in there telling me that they're only going to help me play their way, not mine, that's seriously not cool. That's 2e "dwarves cannot be paladins because IT IS BAD" kind of material.
D&D should stop trying to be overwhelmingly flavorful in the core. It's rice. It's bread. It should let me top it however I want. Not that it should be flavorless itself, but it should take other flavors very well, and serve as a very delicious base.