I remember learning that Negro was frowned upon, in the neighborhood of 20 years ago. Having grown up in Small Town Wisconsin, I had only ever laid eyes on a handful of Black people. This guy was a bit militant and after bugging at the use of Negro; he jumped in someone's face asking "Do I look Black to you?" I remember wondering; if I can't say Negro, and I can't say Black; what the hell am I supposed to say if the subject ever comes up? Anyway, to this man; only African American was acceptable. But how would I have ever known that?
My Grandma used to tell a story about her very old Aunt. At some point a concerned employee at some facility or other asked "what about the invalid?" Reportedly; she cried and cried and when pressed for why answered, "That isn't nice... just because I'm a cripple is no reason to call me invalid."
For as long as it remains fun to make fun of differences; I don't think the vocabulary can be fixed. SNL is world famous for writing off-color jokes and skits and I honestly believe this helps to decrease some of the stigma of being different... rather than increase it.
People will always use Gay, Female, Mentally retarded to some degree as insults for people who are not. Does anyone really want Saturday Night Live to Cease and Desist? Too often, I think, the degree of offense can only be measured by individual reaction... so I don't really see any solution.
Some of my all time favorite jokes "off-color", and I don't think they need to be forbidden:
Ask the Don Juan wannabe braggart;
"Do you even remember your first blowjob? How did it taste?"
After a false accusation about a guy's homosexuality;
"John's not gay
" (matter of factly->) "he just likes the taste of cum."
While
some homosexuals may be offended by such banter; my empirical experience has been very positive when I cast the homophobe as homosexual in satire. Sometimes what may seem insensitive, actually works more towards a solidarity. And few things are more fun that pigeon-holing a homophobe.