As Asian myself, I'm sorry to tell you that in fact it makes sense.
It still doesn't make sense to me. The argument that D&D is based on fantasy Europe is laziness. D&D draws inspiration from many mythologies across many cultures yet it still clings to a Eurocentric model. Dragonborn, Gith, and various other player character races have no foundation in any Euro-specific mythology yet when questioning why there aren't more human people of color (much less why it's decided that dwarves, halflings, gnomes, and elves generally are European only) outside of specific geographic areas, the argument that it's based on medieval Europe keeps getting thrown out there.
D&D is a fantasy setting beyond any real world historical restrictions and continuing to enforce those restrictions lessens the appeal of the game...especially with regards to official material.
Like almost every fantasy genre, Forgotten Realm is heavily inspired by Tolkien's Lord of Rings.
Lord of Rings is a fantasy setting almost exclusively inspired from and based on western culture, British more specifically.
All these fancy concepts of Elves, Dwarves, Halflings(Hobbits), Orcs, that we see in fantasy genre, are direct inspiration from Lord of Rings.
Let's do a simple chart:
Western Culture -> Lord of the Rings -> Dungeons & Drangons -> Forgotten Realms -> Baldur's Gate. Simple.
Denying such simple fact would be mere dishonesty.
