Developereo
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The colonialism history of both Malaysia and Indonesia does not simply follow your analogy of native villagers being discriminated economically in favor of foreigners. That story of course are more easily built to incite nationalism and That is the story the Malay nationalist wants to portray, but it is far from that.
At least in Indonesia, there were a lot of elite natives who collaborated with the Dutch and gain prominence economically and socially. Even now, their descendants still holds economic and political power in the modern nation.
Your example doesn't change the basic reality. In any conquest, there will be collaborators, but the fact remains that the overwhelming majority of the natives suffer due to colonialism. The gains of a handful of collaborators don't even come close to balancing out the loss of the rest of the nation.
So, the statement that colonialism destroys the morale and economic fabric of the natives remains true.
Affirmative action should help those in need, that is the poors and economically disadvantaged regardless of race. If it were to happen that most of the poors are Malays, then help them. If it were to happen that the minority of the poors are Chinese, then you should also help them.
Ideally, all actions should be based on need.
The rationale behind affirmative action is to redress the negative factors hindering an equal playing field. If the minority elites in Malaysia had abandoned their racism and ethnic nepotism, then it would make sense to phase out affirmative action. But the reality is different: Both racism and ethnic nepotism by the minority elites, favoring their own against the majority natives, is alive and well.
It is a difficult situation: each side will claim that they are responding to the actions of the other. At the end of the day, both sides will need to step back and find a middle ground. Almost every single Chinese Malaysian I have spoken to has had extremely racist views of the Malays. It's going to be a long road.