Frankly, I don't remember the last RP I saw that was based on real-life earth that was set even anywhere in Europe. When I recently started an RP (tl;dr version - vampires in the Netherlands), I got some feedback appreciating that the RP was set somewhere a bit different. I don't think it has much to do with 'fear' of Arabian culture or settings, but simply no interest in them, fuelled by a lack of cultural imports. I'm not American, but I'm guessing most of their media is home-grown, and then the biggest import is Japanese. With bags of material rooted in those cultural references and a fat lot of nothing else, it's no surprise that most RPs are America-and-Japan centric.

I can't name a single Arab television show. The absence of Arabian cultural imports is probably the main reason.