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Let's not confuse ethnicity with nationality...
James Joyce, for instance, was born in the UK, when Ireland (and Dublin) was part of the UK; and he opted to remain British all his life, retaining his British nationality and passport. He could, of course, have chosen to take Irish citizenship later, but never did.
But of course James Joyce is an Irish author whose work is part of English literature. (I pass over the question of whether Finnegans Wake is written in English...)
As to the merits of the initial decision, I think it depends on what titles are replacing the two American titles. I must say in my distant youth, English literature studies consisted of British authors, and, as I recall, one token Australian author (of "literary fiction", now largely forgotten.) No Americans; and no Canadians, no South Africans, nor authors from elsewhere in the British Commonwealth.
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