I think the people offended by Art's joke are being a little thin-skinned. is that, while it does make fun of the Taliban who needs water, it also makes fun of the Jews. In fact, it's the Jewish guy who is stereotyped: he dislikes Arabs, and he'll do anything for money. It's not an anti-Arab joke, since the Arab doesn't do anything mean or evil or even stereotypical.

At the same time, the joke is only mildly anti-Jewish. The Jewish guy doesn't want the Arab to die; if he did, he wouldn't send him to the restaurant. He just wants to increase his discomfort and make some money out of it.