Mongol, in early 20th century English, didn't really refer to Ghengis Khan, unless you were specifically talking about history. Mongol in the vernacular tends to be a pretty negative term for Asians - thus we get terms like Mongoloid as a perjorative for those with Down's Syndrome. The description certainly isn't flattering.
And, again, we have to be careful in interpretations not to be dismissive of those who might view things differently. This is literature. There are very, very few "correct" interpretations. So long as you can support the interpretation in the text, then the interpretation, while different, is valid. Simply brushing off criticisms of racism in Tolkien because he's not talking about 12th century Mongols isn't really going to get anywhere.
At the time of Tolkien writing, terms that we would consider pretty pejorative, such as, "squat, broad, flat-nosed, sallow-skinned, with wide mouths and slant eyes; in fact degraded and repulsive versions of the (to Europeans) least lovely Mongol-types" today were not particularly analyzed. However, several decades later, well, when your evil race looks like ugly northern Asians, it's quite possible to ruffle some feathers.
And, really, it's so indicative of the general tone of early to mid 20th century Spec Fic. The casual racism of the day bleeds into the text. And, when we draw from those texts, it can be pretty off putting if we're not very, very careful.