Because that's pretending the government was more progressive than it actually was, kind of like pretending that there was never any massacre at Tiananmen Square.
Firstly, the Chinese government doesn't actually deny the Tiananmen Square massacre. It's something CCP officials have spoken about fairly openly and frequently. What they have repeatedly done is to argue that the brutal crackdown on protestors was necessary to ensure political stability and economic growth.
The US also has an extremely long tradition of whitewashing its own history. That's a large part of what Hollywood (and the games industry, which tends to follow Hollywood conventions) does, for example. Even when Hollywood ostensibly strives for realism in the depiction of historical events, it is very seldom at the expense of a clear ideological message, which for the most part tends to reflect US interests. It is no less blatant or ridiculous than anything China does.
However, there is a big difference, in that in the US, you are able to easily find information that contradicts what you see in media. Such information can be taught in universities or searched for on the internet.
One thing I've learned studying the history of gender is that a lot of people who haven't gone out of their way to learn about this kind of stuff actually do believe that historical sexism did not exist. Not because they believe the 1980s was some gender anarchist utopia, but because they believe that historical societies were naturally harmonious and had a correct understanding of the roles of men and women. To these people, the modern world with its diversity of gendered expression seems terribly disordered and uncomfortable compared to what they imagine were the rigid certainties of historical life. These people have arrived at this position through consuming propaganda which glosses over (whitewashes, if you like) the existence of historical evidence that contradicts this view of a peaceful harmonious historical gender order.
However, again, we don't live in China. The world is also full of media about people overcoming historical sexism, racism or homophobia. Despite the insistence by some people that these are problems exclusive to the present moment and were magically absent from a clean, ordered historical society, the information to the contrary is freely available and sometimes people enjoy those kinds of stories.
But sometimes, I want to be able to enjoy a piece of historical media in the same way a straight or cisgender person does.
Is it disrespectful to pretend (in a fictional context) that non-binary people could have been accepted in the 1980s? Is it a lie? Is it whitewashing?
Maybe. But if so it's only disrespectful to non-binary people, and it's kind of up to us whether we feel disrespected or not. I don't see how any cis person has anything relevant to say about it.