[I started writing this as a comment, but it is too long for that, so excuse me writing it as an 'answer'.]
I have only just come across this meta-post. I don't want to re-iterate the previous arguments, but I do have some concern about how the matter has been handled.
I note that all my comments on the question have been deleted and, while I certainly agree that a lot of them did not need to be retained, (from memory) I was the only non-American supporting hippo's comments and I would have hoped that you would have retained an indication that he was not alone in his views.
Beyond that, my main concerns are 2-fold:
The arguments seemed very one-sided (from Americans) - and specifically, you - as an American - have 'adjudicated' on it, and decided which comments to delete and which to retain. I would have hoped that a non-American moderator might have been involved.
You state above that the issue arose from "an incorrect understanding of what the phrase means". While I can't speak for hippo, my personal view is that that was not the issue - which is why I am concerned that the 'adjudication' appears to have been one-sided.
Comments to me (primarily from J.R.) keep insisting it was a 'language/meaning' issue, while I insisted that it was an attitude issue. I also expressly stated that I had no objection to the expression being used by Americans or by non-Americans about Americans (or possibly even non-Americans competing on behalf of US colleges, as Jack Ryan now seems to suggest). I believe I do "understand what the phrase means", and that it is intended as a positive compliment.
What I strongly objected to was the suggestion (in the original answer) of others being 'jealous' about Americans; and of the implicit applicability of the expression to any and all irrespective of nationality.
Just as you feel that hippo's understanding was incorrect, I genuinely and strongly feel that many Americans do not have an understanding of how offensive many non-Americans would find it to be described as "All-American", even with it conveying the most positive meaning intended. And I feel that that lack of understanding - or even attempt to understand - was manifest in a number of the comments.
In saying that, I do not mean to suggest in any way that I am anti-American, but American culture and values - however positively they may be regarded - are different from those of other nations. I doubt that Americans would wish to be referred to as "All-British", "All-French" or "All-Australian", etc. for similar reasons - not because the different countries have better or worse values - but because we all have different values and attitudes.