I think the point is that Wagner wanted to make those Teutonic myths Germanic myths, and create a sense that there was a deep, traditional, historic culture that united all those states that had been floating around loose since Napoleon had destroyed the Holy Roman Empire and subsequently was destroyed himself.

To be cruelly honest, I don't much care for Wagner, and think he made a mess of the Nieblungenlied and Parsival and harbor the suspicion that part of the reason Ludwig II was done in had to do with "artistic differences" about that sort of thing.