Blame Edward Said for the demise of the word "Oriental"; before he published Orientalism I don't think it crossed anybody's mind that the word was in any way pejorative or some kind of value judgment (at least when used as an adjective, not a noun).
The OP seems muddled, however, in that "oriental" (literally meaning "of the east") was always an even vaguer term than "Asian," and was routinely applied to anything from Turkish carpets to Ming vases to Indian spices. As applied to people, therefore, it wasn't and isn't a terribly useful term. This sentence
I in turn pointed out how ignorant he was for completely excluding the billion Asians surrounding us who were not Oriental.
then, is close to complete nonsense. India was considered as "oriental" as China from a European point of view.
I think it's still more or less acceptable to use "oriental" to refer to an objet d'art, but in today's world I would never use it for a person. Use "Asian" to refer to anyone from Asia, and add a directional modifier if you want to narrow it down (e.g. "East Asian" is generally understood to refer to Japan, China and Korea; "Southeast Asian" to Vietnam, Cambodia, Malaysia, Thailand, Indonesia).
