Why is ethnic what it is? Because the PC thought police had an extremely limited vocabulary. Now we’re stuck with this hideous bastardization of what was once a perfectly servicible word. I say either use it according to strict definition, or boycot it alltogether. It’s somehow both meaningless and constraining in its present form. There is little to the “why” beyond that sickening fad of the late-'80s-early-'90s, the purely artificial and fatuously concocted “white vs. non-white” dichotomy, vetted without any good definition of either. Help reclaim a meaningful vocabulary; banish this corruption of “ethnic”.
Actually, the people who have bastardized the word are not the “PC police” but the xenophobes who have to label everything outside their limited experience as “different.” To the extent that someone would use “ethnic” to mean “not white” they are not following PC (which would simply be to call people by whatever term those people prefer), but using code words to pretend to hide their xenophobia.
By the way, I have seen “ethnic” used in another context…When I was up in Montreal during the narrowly-defeated referendum on separation of Quebec from Canada, the Premier of Quebec made an infamous remark that night about how they had lost because of “money and the ethnic vote” (of course, he said this in French…“la vote ethnique”). By ethnic in this situation, he meant non-Quebecois, i.e., not French Canadian.
So, this was an interesting case on this continent of anglo-saxon whites being considered “ethnic”. It is indeed all relative.