Here's a way to test the validity of that position in the real "politically correct" world: Find someone you love or respect who has parents of two different races or ethnic origins and ask that person how he or she feels about playing a "half-breed" character in D&D.
You rang?
I've been a gamer since 1977, and a person of mixed race since 1967. I call myself "Human Gumbo": I'm able to trace my origins to 5 of the 6 occupied continents, including Native American (North & South), Eastern & Western European Jews, French, German, Moroccan, Spanish, Puerto Rican, Italian, something from the British Isles, something from the far east...and that's just going back to the 1800's. In places like my home state Louisiana, I'm considered "black," but in Texas where I currenly live, I'm legally considered "Hispanic." In other places, I'd be called a "mulatto." I've been mistaken for everything from Mexican to Samoan to Turkish.
I've played Half-Elves and Half-Orcs. I do not find the term "half-breed" offensive in game. I've even used it.
Of course, I'm only one person, but that's my slant on things.
Would I support calling in-game black skinned races ni--ers?
If I were playing an American Neo-Nazi or a Southern soldier in a Civil War era game, I would- its linguisically and chronologically correct for the PCs in question.
Even Mark Twain used the term in his literature, though he wasn't a fan of the term.
Its about context and accuracy.
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