You might want to take a closer look at those legends: they are always earth-fey/elementals. They are always associated with being powerful practitioners of magic.
Yes, but the same would be true for elfs, dwarfs, goblins, or a variety of other creatures. Frankly, all those legends are
more associated with elfs, dwarfs or goblins, and if the word gnome is used at all, it's usually as an alternative.
And as for "more established", well, that's plain wrong. Gnomes didn't show up in legends after Elves and Dwarves and steal their thunder- the names are interchangeable in many legends. In fact, in some legends, more than one term is used for the same being (like Alberich).
No, it's not plain wrong. In fact, that's exactly what I'm saying. Gnome as a label is interchangeable. It's not specific. And usually the "preferred" term would be elf or dwarf. At no point is there a specifically
gnomish presence that's different from the elf/dwarf/fairy/Wee Folk/Little People whatever. Alberich wasn't ever called an elf, or a dwarf or a goblin or a gnome, he was Alberich, from
elbe reix, which means quite literally, "king of the elves." How you've managed to position that as evidence or a specifically gnomish presense in myth, legend and fiction is quite beyond me.
Or as another example, consider the Redcaps of England & Scotland: depending on where the legend is told, they are a kind of malevolent murderous dwarf, goblin, elf or fairy...that looks like what many D&D players would call a gnome...albeit with a bit more attitude.
In other words; goblins. I think
maybe you could make a case that the gnome could represent the Wee Folk version of elves; as opposed to the "high" Tolkienian presentation of elves. But I don't think D&D has done a very good job over the years in consistantly portraying them that way, and frankly, if the gnomes were to be cast as a kind of less malevolent redcap, or other more fae-like creature, that'd kind of be a
new direction for them in D&D. In D&D specifically, gnomes have been jack of all trades understudies to the dwarves, the elves and even the halflings, without really having a strong identity of their own. As much as I don't particularly care for them, I think the dragonborn have a much stronger identity, and much stronger place in D&D than gnomes do anyway. And tieflings have been growing their role in D&D ever since the days of 2e; arguably they're more iconically D&D than gnomes too. :shrug: