Why did Medieval Western Europe become the default setting/reference for high fantasy novels rather than other time periods or cultures?

I’d highly recommend Adam Whitehead’s History of Epic Fantasy for a detailed narrative of the development of the fantasy genre. 

The TLDR version is that the first writers of what we consider fantasy today were all working off of what they knew – and what they knew was European history and folklore, if for no other reason than they were Oxford dons who had spent their lives studying it. 

And for better or for worse, the genre has always been one that played follow-the-leader to an extreme degree, where the styles and themes and world-building choices of early creators became the rules everyone needed to follow.