I think you have touched on a key issue in spiritual circles and your critique of much New Age spirituality really hit the mark. The distinction you made between extinguishing the ego and developing a healthy ego and then transcending it has been viewed as the difference between mythic spirituality and integral spirituality. In Indian philosophy, the predominant spirituality has been mythic but the Bhagavad Gita, Mahayana Buddhism, and tantrism have expressed an integral view in which the world is not rejected but seen as divine. Social responsibility is embraced; the ideal is not to float above the world and disengage.
As a white male American, I have gone through a similar journey, wanting the ego's destruction because it was too painful to confront the wounds that a modern patriarchal society had produced in me. As you write, we need to make contact with all the repressed parts of ourselves and to attune to our ancestors. We need to connect with all that exists, has existed, and will exist. We are human beings and not meant to reject our bodies and nature.