As an Indian-American, "South Asian" is a perfectly reasonable ethnic grouping in the United States. Collectively, that represents ~1% of the US population, too small a grouping to reasonably split out when talking about ethnicity in general terms.

All cultures are fractal. For my own ethnic heritage, for example, I could insist on splitting out:

* South Indian Dravidians from North Indian Arynans

* Kannadigas from other South Indians

* Lingayats from Vaishnavites

But that level of detail (absent special contexts where its relevant) would almost always confuse rather than clarify.