does this seem like a "incorrect use of prepositions"?

Your use of the preposition is fine. I don't like 'all over' in this context. Are you talking about all over the city, state, country, or world? The use of 'was' implies that he is no longer missed. If you change it to 'is', it says that his passing still affects his loved ones. Try this.

He is missed by family, friends, and poets from around the world.