Perhaps there's too much focus on a particular word - what really matters is the intention behind the word; and in this case the intention was the problem. If he'd stuck to words like black or Afro-American and said the same otherwise, it would have been just as bad. (The precise opposite to the situation with the Lenny Bruce quote, where the intention was the polar opposite.)

Clearly Kramer opened up something inside him which was pretty unpleasant, and, from that apology, he appears to have recognised it was pretty unpleasant and that it needs to be dealt with by him.

It's inside an awful lot of people who sincerely think they aren't racist, and various things can bring it out - drink, mental disturbance, pressure. In this case the kind of tension involved in this type of performance.

The moral is, people shouldn't feel too smug about themselves - and that shouldn't mean a willingness to shrug this kind of thing off, but a determination never to tolerate it in ourselves or in others. Whoever the target group may be.