Modern fantasy is indebted to the Victorian view of the Middle Ages and is as much a continuation of that view as a reaction to it.
I’m reading Beyond Arthurian Romances: The Reach of Victorian Medievalism, which is a very good collection of essays. The main idea is that Victorians tended to idealize the Middle Ages, especially as an age of faith, but also as an age of heroism. There are two essays on William Morris, whom Tolkien read and whom I’d include among the founders of modern (heroic) fantasy. The first is on Sigurd the Volsung, which is a verse epic based on the Sagas, and it’s definitely about the Middle Ages being a time of epic in contrast to the capitalist, degenerate 19th century.
Another point is the sanitizing of the Middle Ages; this is where the reaction to the Victorian view comes in. The kind of modern fantasy that thinks it’s being realistically medieval by having dirt and murder and rape is reacting to the “purified” Victorian Middle Ages, but it’s still taking part in the view of the Middle Ages as age of heroes – as opposed to the modern world, where there’s no room to be heroic.
Both views, the gritty and the sanctified, simplify the Middle Ages, of course; most fantasy tends to try to write a medieval world without the Church or else don’t sincerely believe in their characters’ belief. And Victorians made the Christianity of the Middle Ages the same as Victorian Christianity.
But in any case, when people write “realistic medieval fantasy,” they’re demystifying the Middle Ages they grew up with, which is still, to some extent, the Middle Ages of Disney (See the book The Disney Middle Ages), which is definitely a derivative of the Victorian view.
Obviously, it’s hard to get back to what the Middle Ages really were, but it’s not just dirt and grit, and it’s not just knights and ladies; right now we’re on the dirt and grit side of the pendulum, but it’s more like putting dirt on the pretty Victorian paintings of knights and ladies than getting back to primary sources.