Where's the medieval Europe in Forgotten Realms? I think FR has always been kind of lackluster and stupid, it's basically "anything is possible, just pile up one hidden civilization on top of another", and it's the most popular setting of D&D, which existed even before CRPGs.
FR was, in a way, the beginning of the end. But it's lousy
with medieval Europe. Greenwood wrote a lot of articles, editorials, notes, pages from the mages, realmslore etc to ensure the power in FR stays where (in Greenwood's opinion) it belongs, that is with Elminster's sex partners and hereditary nobility. I hate that, I really do; fantasy should be quadratic or GTFO. But the important distinction between FR and the recent cheapass settings is that Greenwood actually put in effort! Volumes of effort, in fact. He wrote histories and dynasties and power structures and law codices to prevent adventurers from being awesome
. Yep, there's a lot to hate. But no one can justifiably say the old perv was lazy
So if what you say is true, it's not a recent development but one that was there right from the start. The only difference is that back in the days it was still something new because they were the first to do stupid fantasy as a videogame and partly invented the tropes instead of just repeating them.
While it's true that Moorcock did not vanish overnight, the good tropes were recognizably present in the late 80s - early 90s. Ultima, Wizardry 6-7; Might and Magic lasted until 1998. The most imaginative of recent "official" fantasy RPG settings is what, Eberron? And yet Baker threw his hands up in the air and went out of the way to be a cockblocking low-level bore. My only hope is for WotC to get their head out of wherever is that they've stuck it and make use of MtG settings (which are awesome), but with the reverse Midas touch that the D&D brand leadership possesses it's unlikely Hasbro will let them anywhere near the cashcow.