Well, it is an executive decision for the game to remain canon up until around the time everyone from Episode 1 was born. This way, we can enjoy making our own Star Wars stories and characters without having to rewrite all of galactic history. The Republic formed, the Mandalorian Wars and Ruusan Reformation both happened (just to name a few major historical events), and all the species that have gone extinct by Episode 1 are dead. It is a lot easier to get into the game and its history by having it diverge from canon only recently (speaking in IC galactic terms, of course). It would be weird to see a Rakata or a Taung knowing that they have been extinct for thousands of years; "How could galactic history have changed that much?!?" one might exclaim in despair and then be miserable from curiosity and confusion for the few days that they play the game before throwing their computer out a window in exasperation and leaving the Combine forever. While this is obviously a drastic and exaggerated example, it still maintains the point that it is easier to get into a Star Wars game if there is at least some relation to pre-established Star Wars stuffs.
Plus, people generally like Star Wars history up until Episode 1 came along, so there's that too.
As well, the Alderaanians are a race whenever they should be "extinct" in canon, so there you go!