If you want to be terrified by cultural ignorance, you have only to go to YouTube, where an activist went to four major universities with a camera and asked random students what the Holocaust was, what nation Adolph Hitler led, and whether they could define genocide. One after another, bright and involved students failed to come anywhere near the truth. (You can find the film here; the questioning begins at 2:22 and I found I couldn't stand to watch very much of it.)
I mention that in order to put this post into perspective. I'm about to lament how a working knowledge of the history of science fiction and/or fantasy, which used to be common in both genres, has become a rare and endangered thing. But I don't want to overstate my case. Compared to well-educated young people smiling in embarrassment and saying, "Gee, I ought to know this," or "1800?" when asked when the Holocaust occurred, this is small potatoes indeed.
Over on Facebook, somebody reported attending a panel of fantasy novelists at Comic Con where a reader asked if any of them were influenced by Lord Dunsany. None of the writers had ever heard of him.
Once upon a time -- long, long ago in the 1970s -- all science fiction writers and most fans knew the history of the SF genre inside-out. Lester Del Rey's terrible (and astonishingly sexist; but it would have been a terrible story even if somehow the sexism could've been magicked out of it) "Helen O'Loy" had been read everybody -- because it was a significant work in the evolution of the genre.
Fantasy fans and writers had an even easier time of it, because there was so little classic fantasy back then. You read the Ballantine Adult Fantasy series as they were reissued under the editorship of Lin Carter, E. R. Eddison's books, the Gormenghast trilogy, maybe the Conan books, a handful of others and you were done.
At the time I sold my first story, I had read pretty much every important work of science fiction and fantasy ever written. As had pretty much every writer before me.
Today that's not possible. Amid the great avalanche of genre being published every year are enough genuinely good books to keep even the most voracious reader satisfied, without having to dip into the past. But it would be a mistake.
I'm not going to mourn the passage of a more innocent time: Believe me, we would have loved to have all these new books available back then. But ask yourself this . . .
Who's more likely to come up with something brilliantly unexpected: writer who've fed their brains with a steady diet of contemporary fantasy and SF or those who've read Dunsany, Mirrlees, and the other great outliers, and thus has an idea of exactly how strange and varied fantasy can be?