Raspbmc did not use /etc/network/interfaces. It used NetworkManager. Similarly, OSMC does not use this file, it uses ConnMan. Of course you can use this way of configuration but OSMC does not support or recommend it. We abandoned this method of configuration because it is not very dynamic and does not provide an easy enough interface for modifying network settings.
You can configure a static IP address for your WiFi dongle via My OSMC -> Network. You should remove the interfaces file if you do this
S