I feel like Chinese architecture is pretty creative ... sure it isn't all Chinese traditional trim, but structures like the Expo Center in Shanghai, or the Bird's Nest in Beijing, these are not really the types of things you find in the West. Sure they aren't "traditional" but they're Chinese just the same. How boring would architecture be if all Chinese buildings had to stick to "traditional" Chinese forms. Plus there are definitely quite a few Chinese architects who are trying to fuse modern and traditional modes of architecture. One of my students, who is headed off to USC in the fall, actually did a big research paper on this exact topic.
It feels like kind of a cop out to say "oh well slap some traditional trim on stuff, that'll make it "Chinese" rather than "Western." I think that is more playing to a Western sense that when we're in China it should look like China, and disappointment with coming over here and seeing people not dressed in Qipaos, not seeing tiled roofs, no monks on every corner, no opium dens, no Joy Luck Club fantasy China. But that's our hangup, not China's. I honestly don't care if the big buildings have Chinese touches or not, in fact, some buildings, like Beijing's Western Station, or the Friendship Hotel, which are a big concrete building with loads of Chinese trim, I find kind of ugly. Not creative at all.
The problem with traditional houses is not just that they're flammable (although, not every places uses mud-brick. The old structures in Kunming were almost all wood, and if a fire had swept through the city it would have been catastrophic), it is that in the middle of the city that is prime real estate and it is much more efficient to build upward rather than outward. You can keep the old houses, like the hutongs in Beijing, but they become extremely expensive. Do you think most middle class Chinese people can afford to own a hutong? Even renting, the cost is ridiculous and you're paying out the nose for the privilege of having your own space. Usually the traditional courtyard houses were already split, so good luck finding one with all sides of the courtyard available for use, and if you are lucky enough to find one, and one where you can live in the same comfort that you'd live in in a "regular" apartment, expect to pay out the nose. Looking through listings, I recently came across a hutong house for rent. Beautiful, up to date, a dream house really. 18,000RMB a month. A humble two room (and that's all, no living room, kitchen, etc) courtyard house done up modestly still cost over 5000rmb a month. By comparison, I just signed the lease on a new apartment in Beijing, 200sqm, 4 bedrooms, about the same level of luxury as the beautiful courtyard house, but the rent is 1/3rd of the cost. Traditional houses are fine for the village, where populations are less dense, but in a big city by and large they just aren't practical, not when you have to house a huge number of people and those people want to live in comfort.
As for Chinese apartments fitting in in America --- really? Most Americans live in the suburbs, in stand alone houses. When people do live in apartments they are almost never high rises, not outside of New York City. The traditional American style of living is very different from what a Chinese city dweller experiences. The apartment blocks here are, I'm fairly certain, actually Soviet-style, not American. They were created to be no-frills efficient housing, easy to erect, housing large numbers of people cheaply.
I do care about preserving historic old buildings, but I don't see how it is really possible in the cities on a large scale. At most you can do an "old quarter" in cities that have historic buildings, but inevitably those places will become touristy and "inauthentic" to some people (I feel like Dali and Lijiang, for instance, do a good job of preserving their own local feel, but tourists always complain they're too "commercialized.") You just can't win. If you don't specifically designate and subsidize areas (and how do you fund these areas but through tourism?) that are to remain "untouched," Chinese people are going to destroy them because they want money and comfort more than they want old buildings.
Buidings are a really tricky topic though because of the economics involved. Other traditions are much less problematic to promote -- traditional music, arts, language, fashion, etc. Most of that comes down to individual choice and freedom, rather than large scale city planning and government policy.