Of course academia pretty much exists in order to deconstruct everything to a degree that most non-academics (and even lots of academics themselves) find tiresome. But if they couldn't do that, what would they have left?
I do think there is some worth, however, in making students aware of the issues with how the West portrays the East and some of the theories behind why that is. I can enjoy Amy Tan as a novelist and think she tells a good story while also being aware of some of the problems with her writing as a whole.
I don't know. Chinese-Chinese students are, for the most part, not even aware of why they shouldn't call themselves "yellow," so the intricacies of post-colonialist theory might go above their heads but then again, they can surprise you.
I don't think any of this is particularly controversial really, even for the students, although sure they might get angry when they figure some things out. It doesn't take a PhD scholar to pick up on the idea that China, when portrayed in Western media and film, is usually either a) exotic and mysterious or b) evil and corrupt. In fact, have a hard time thinking of a single Western portrayal of China that doesn't fit int one of the two categories. I think the interesting part is challenging the students to think about why that is and what it means.