My opinion on this subject is constantly changing, or I should say "evolving." I believe the songs should exist in the "original" form somewhere, if only to serve as a record of the roots of the song and a snippet of life from the past. As history they shouldn't be changed or made into something polite, epecially if the reason is we don't want to remember something we now find distastful.Whether to perform songs with racially offensive lyrics, is a whole 'nother question. When you sing them, the song will not be questioned, but your motives will be. Sure, some people will be offended by any use of racial epithets - or what we now consider epithets. Most folks will be wondering what exactly you're trying to say by singing those songs. "Does this guy have a hooded white sheet in his closet?" or "Is this guy commited to historical accuracy, and trying to portray a past way of life?" If your audience doesn't know where you're coming from, you could be in trouble.
I actually was stupid enough to once e-mail a representative of the NAACP (National Association for the Advancement of Colored People) and ask this very question - what is your opinion on the singing of old songs with words now considered racially offensive? I never received a reply. Maybe he thought the answer was something like "you're going to have to ask each person who hears the song." Maybe he thought the question wasn't worth his time.
Personally, I cringe when I hear words like "nigger," even when I know the singer is far from being a bigot. Maybe it's a good thing I cringe. Maybe it's a good thing I'm reminded of the words and my distaste for them. And maybe it's a good thing to know that people once used the words in everyday speech and song, without any thought or care they might hurt someone. Personally, I'd love to hear the viewpoint of even one African-American on this subject, but that's yet to happen.