But "Traditional American Culture" wasn't set aside, nor was she "dancing on [anyone's] cultural grave." There was plenty of traditional american culture on display during the talent portion of the pageant: singing and dancing to American music, tap dancing, musical performances, baton twirling, and so on. There were also a handful of performances of different origins: Irish step dancing, ballet, and, yes Bollywood dancing.
The point is, that IS "American culture." American culture (and particularly music/dancing/performaces/etc) has always involved an element of borrowing from others.
This logic exposes the flaw in multiculturalism. “All culture is American culture” = no American culture.
I understand your other point about plenty of traditional American culture being in the show but so what? People only reacted strongly to the one.
Multiculturalism breed conflict, breeds resentment, breeds hatred and ultimately violence. History repeats this over & over.