Blue Orange
Gone to Texas
As an undergraduate, I took a lot of anthropology courses that were also part of our Middle Eastern Studies program. In one of my courses, we were covering modern Egypt and I was a bit surprised to learn that many Egyptians still have a connection to ancient Egypt. I had assumed because it was so long ago, pre-Islam, and they didn't even share the same language that they wouldn't really care. Boy, was my assumption wrong.
I recall hearing on the news that a lot of Greeks weren't so keen on Disney's Hercules cartoon.
'300' didn't go over so well in Iran, but they're not a major market and relations with them aren't so good anyway, so the studio got away with it.
And yeah, people from really old cultures love to draw on that history.
FWIW, I am half Jewish, and think this is kind of silly. (I mean, I guess the gnomes were kind of stereotypical being short and having big noses and liking gold, but they were a good race and had that neat illusionist thing going on, so not so bad? I guess if they were evil and owned all the banks it would be a different story.) But I can't blame Paizo for wanting to stay out of trouble.
(BTW, the original description of the illusionist class in Dragon was done by a Jewish guy.)