Because fantasy wasn't really a codified genre back then, but a way to describe stories. The writers were free to ape what ever they wanted, instead of aping shit that was already called fantasy, leading to higher quality influences. Like Howard, who wanted to write violent poetry and historical fiction, but ended up writing fantastic tales (for several reasons, including monetary).
When writers started writing what they thought fantasy was supposed to be, it quickly became increasingly inbred circle jerking. The whole "genre" is a poor joke now, with supposed subversions being more generic than early examples of it.
But to be fair, the effect that only good things are remembered in later times applies here. A lot of pulp era stuff was horrible garbage, and I bet there's good fantasy being written somewhere right now that will be noticed only decades later.