I agree with you, I think it's going too far. I also loved the Little House books as a kid, and reading them as an adult, especially the later ones, I see all kinds of things I completely missed as a child. They are actually very complex works--I'm sure someone has written a dissertation on the use of "shame" in them, for example. Like I remember when Laura is a teenager and automatically catches a ball thrown by some boys at school and lobs it back, then feels ashamed of herself for not being ladylike--she feels ashamed of herself, not because of anything anyone else has said or done right then. The book treats this as the right way for her to feel, but obviously that's problematic in a modern context. To me that's a jumping off point for discussion with an older child, not a reason to suppress the books or even downgrade the author's stature (because then it becomes ALL ABOUT the downgrade--like maybe you could avoid naming something NEW after her instead).
I think the books are so valuable precisely because they're a window on their time. In another scene I recall, the town has a debate society, and the two teams debate whether blacks or Native Americans have been treated worse by white society--with all the town's citizens being white. It represents something that really happened in many places, I imagine, and has so many layers to unpack for a modern audience. (Laura's team wins after she contributes a story about how when she was a child and her family was afflicted with some disease, the doctor who treated them was black--so at least one black man became a doctor, but a Native American could never do that, so the Native Americans had been treated worse.)
Also, mentions of non-white people are only a small percentage of the entire series. I think that's important because if you had a book where the main plot was about a non-white person, and it was handled really badly by today's standards (if acceptable at the time it was written), there would be a lot more reason to not celebrate that author. But, I don't think most young kids are going to pick up bad messages from reading the books on their own, and with older kids you can talk about any problematic parts and make it a learning experience.
Many older kids' books have problematic parts. Roald Dahl for instance--I read Charlie and the Great Glass Elevator as a kid (sequel to the Chocolate Factory) and that has a certain number of racist or at least problematic jokes in it. In the book there's an international crisis and a main character is the US President and his advisers, who are primarily idiots. They're trying to call the leader of China, but "China is so full of Wings and Wongs, every time you Wing, you get the Wong number." There's also a gag about "How long is a Chinaman's name... No, really, his name is How Long." The joke is partly about how stupid the President and his advisers are, but also feels pretty weird for the ethnic part now.
The reason I remember it so vividly is that when I was a kid, I read this on my own, and thought those jokes were absolutely the height of humor--puns, and so on. I even made a song about them, which I performed for my extended family. To this day, they still bring up that story--but they don't find the joke racist or cringe-worthy at all, they just think I was so clever as a little kid to come up with those puns (I guess they also thought I came up with them myself). It's like, could you please not remind me of the racist jokes I used to tell as a kid when I didn't know any better? Oh wait, you guys don't even think they're racist. NOW we have a problem.
So to me, having questionable content in a historical book is not the problem. It's when you don't recognize that it's there, and help your kids understand why it's outdated. That's so important and valuable, and helps kids think critically about future issues they encounter.