I agree that the Egyptian royalty concept is more singular than the Thanagar version. I remember years ago in the comic store, a guy was saying to his friend that he just can't get into DC because all their heroes are aliens.
Of course, that's not exactly true, but a lot of the big guns like Superman, Wonder Woman, Aquaman, Hawkman, Martian Manhunter are alien or from wacky comic book lands -- far different than Marvel where basically only Thor falls into that category among their A-listers.
So, I like the idea of a regular guy and gal off the street discovering they are reincarnates of ancient Egyptians. I also agree that it allows writers to connect them to Dr. Fate and Metamorpho as mentioned above, but also to Shazam, Black Adam, Ibis, Isis, and immortal characters like Vandal Savage.
The Justice League series did a good spotlight episode on Hawkgirl and John Stewart sharing a past in Ancient Egypt. Quite frankly, I never found any Thanagar stuff compelling, and once the post-Crisis reboot made Thanagar yet another rich-oppressing-the-poor place, I was even less interested.
Reincarnation and Ancient Egypt have more of a mythic romance feel to them, while Hawkworld-Thanagar only feels derivative.