We have no inside information on this subject, but the pilot was written in New York by two people who had no connection to Bruce Lee. Warner Brothers bought the script and it bounced around their people for some time. During this time, someone from the studio discussed it with Bruce Lee and that person probably asked Mr. Lee questions about the Shaolin. We do not know if any information from these discussions and answers was incorporated into the script. The script Warner Brothers bought was far too long for a movie of any kind and so had to be seriously cut, not expanded. On the other hand, some of the information gathered from Mr. Lee could have been changed things in the script they ended up shooting or have been used in the series later and his information may have provided support for the whole project.
Still, Bruce Lee probably honestly thought they were considering him for the role while the people who had control of the project claim they never talked to him or considered him. But someone at Warner Brothers surely talked to him and may have given him the impression that he was being considered.
Was there racism involved in the fact that the people in charge of the project didn't consider Lee? That seems likely. But in the special on the new DVD a VP of ABC said that Lee came to see him and he had trouble understanding what Lee was saying and he felt that pretty much disqualified him. Although he admits that Lee had an enourmous "presence" and he talked with some people for about an hour about the possibility of using Lee.
But it was after this series came out that Bruce Lee did "Enter the Dragon" which changed the world of "Kung Fu" movies.