Surprised, because, it is, after all, quite common. You can find "Injun" and "Honest Injun" in older books that are widely read today, like:
The Adventures of Tom Sawyer--published in 1876, where "evil is embodied in the treacherous figure of Injun Joe" (pg. x of the intro to The Adventures of Tom Sawyer and Adventures of Huckleberry Finn, a Signet Classic book published in 2002), and in the oath used several times by characters.
Seems to me, in my cursory study of the phrase, that it may have been coined by Twain. In the entry on "Injun," the Oxford English Dictionary (OED) lists Twain as the first person to use "Injun." It also lists several other noted writers who used "Honest Injun." Some are George Bernard Shaw in 1896 and James Joyce (in Ulysses) in 1922.
Comment: I find it hard to believe that no one used "Injun" before Mark Twain in 1876. But I have no evidence that this claim is wrong.
For more on Steele, see Calling BS on Steele's "Injun" and Steele's Hypocrisy on Racial Slurs. For more on Twain, see Is Huck Finn Racist? and Mark Twain, Indian Hater.
Below: Injun Joe.