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The Middle East is a transcontinental region in Afro-Eurasia which generally includes Western Asia (except for Transcaucasia), all of Egypt (mostly in North Africa), and Turkey (partly in Southeast Europe). The term has come into wider usage as a replacement of the term Near East (as opposed to the Far East) beginning in the early 20th century. [… ] The term "Middle East" has led to some confusion over its changing definitions.
Why and when did this definition change? If "East" means Asia, then clearly Turkey, Syria, Israel, Iraq, etc. (which are often referred to as "Middle East") are not in the middle of Asia. The middle would be countries like India, Kazakhstan and Nepal. (And then the "Far East" would be Korea, Japan, etc; which it is in general usage.) In the past, as above, this region was called the "Near East," which seems to make more sense. Additionally, the Wikipedia definition including part of Southeast Europe would further work against calling it "middle."
One could of course use an absolute description and call this region (excluding North Africa) "Southwest Asia" (Northwest Asia being in Russia, which is another can of worms as to the "Europe or Asia" question), but that term does not seem to be in wide use outside of the US military.
This article at the Washington Post claims the name Middle East for what was the Near East started changing after World War I, when the British started governing territories that were formerly part of the Ottoman Empire.
For British colonial administrators, the Middle East was the region that was crucial to the defense of India, while the Near East was largely under the control of the Ottoman Empire.
This all changed after the Ottoman Empire's collapse a century ago. The Balkans and then modern Turkey began to seem more Western, while other parts of the Near East came under British control and fell victim to that empire's bureaucratic reorganization. Winston Churchill, as secretary of state for the colonies, created a “Middle Eastern Department” covering the newly acquired territories of Palestine, Jordan and Iraq. Now this region, too, became part of Britain's plans for defending its colonial holdings everywhere east of the Suez Canal.
Google Ngram of the phrases Near East and Middle East
During the Second world war, people starting using Middle East to refer due to the fighting the North Africa, as well as other countries in Southwestern Asia. The British imperial term became popularized in the English language.
Thus the answer is a combination of British Imperialism and world events lead to the popularization of the term Middle East.