Yeah, I'll agree with you on that. Reading the TPB of Shang released a couple of months ago, I realized that while there were moments of racial stereotypes this and Yellow Peril that, the story still held up. The action was still cool, and Shang himself wasn't too much of a stereotype. Rather, I saw him as being very thoughtful and observant. While other people were discriminatory towards him, he still seemed confident and aware that yeah stereotypes are bad. Plus, he and the series could be progressive at times. There were occasions where (gasp!) he showed affection towards a women and was allowed to be passionate. So, I still find the series to be worthwile, though it could be updated here and there.
That's a dilemma I had as well. How accurate do we go with Shang? If the movie goes this route, than Shang wouldn't be full-blooded Chinese. Rather, he's Hapa, and then may have to have a Hapa actor play him. Personally, I'm fine with either a Hapa or full-blooded Asian play him. However, I'm pretty firm on the actor playing Shang to have some form of Chinese descent. That Chinese descent has to be there.