@AbdulAlhazred actually answered this fairly well by noting the disparate sort of media inspiration that D&D drew from that "Oriental" Adventures did as well as the degree of familiarity with the source material, the writing time, etc. It's a work that feels devoid of the literary cultural milestones of its respective cultures. Where is The Journey to the West or Romance of the Three Kingdoms in all of OA? It's about like D&D without King Arthur or Robin Hood, the stories of Greek mythology, Robert E. Howard, Michael Moorcock, JRR Tolkien, or Lieber and Vance, much as you say. Or if D&D was designed in China by people whose only conception of Western fantasy was the popular media of Disney fairy tale movies, Harry Potter, plus other random things that the people knew about the United States: e.g., "let's put guns in this fantasy world because Americans love guns" or writing "Americans greet each other by saying, 'Have you eaten your McDonalds Happy Meal today?'"
Often visual media has more impact internationally than written media, and when OA came out, I wouldn't have expected the authors to be very familiar with things like wuxia novels for example. Samurai movies, kung fu films, wuxia films, and american literature inspired by Asian literature, like the Shogun novel, were just more likely to be what inspired something like OA at that time. People need to remember this was pre-internet, and it was very easy to have huge blind spots in knowledge even if you were deeply interested in a topic.
That said there is nothing wrong with something being based on a visual media source rather than a literary one. It produces a different final product, but I think it is a little dismissive of the value of things like Kung Fu and Wuxia Films. Yes this is genre, but there are a lot of very well made films within that sphere (Dragon Inn for example, The One Armed Swordsman or Confessions of a Chinese Courtesan). The problem of OA is just that its perspective would have been so much more narrow because its access to this material would have been extremely limited. It is a lot easier to get a sense of the 'canon' of Chinese Wuxia films today for instance because of the internet. But back then it was entirely possible to know nothing of landmark movies like the ones I mentioned, even if you were a fan and had seen lots of other films from that genre.
Today we are seeing more tranalstions of things like wuxia stories and greater familiarity with stuff like Journey to the West, but we are all largely benefiting from he cultural conversation that has happened since OA came out. I think it is a little off for us to sneer at it, like we would have done better, when we are the beneficiaries of decades of development (including massive advances in communication technology like the rise of the internet and smart phones).
And there are Chinese fantasy movies and shows inspired by western media. One aspect to them is they don't have deep knowledge of the genres that a person from America or England might have, but they also bring something new and fresh to the table, and I wouldn't look down on them simply because they don't have the same familiarity with the literary traditions undermining the works. These shows are fun and entertaining and often get things about western fantasy completely wrong, but that is okay (it even leads to more interesting places sometimes).
But there are also examples of Chinese writers who have deeper knowledge of western literary traditions. Gu Long is supposed to have taken a great deal of inspiration from sources as varied as Hemmingway, Ian Flemming, and Mario Puzo. Both the deeper and less deep approaches can exist and both be fine.
Don't get me wrong I think people being more familiar with this stuff is good. Journey to the West is one of my favorite books, I like reading wuxia fiction translations and I adore Pu Songling. But not everyone is going to come to a game, as a player, GM or even a designer, with the same depth of knowledge. That depth of knowledge can be useful. But I don't think it is, or should be a requirement. Someone with less knowledge might still be able to make something fun and interesting that people want to play, even they are not doing the deep dive into the source material, or are limited to a thinner level of source material because of their means. Not everyone has the time, money or luxury to become nerds of a genre, and I don't think they should have to just to participate in what is supposed to be a fun hobby.