The entire cast of the Simpsons is based on stereotypes. Even Homer is the classic lazy, fat, alcoholic, and dumb American father. Flanders is the overly religious Christian of good heart that wouldn't hurt a fly. There are stereotypes of other whites like Willie and Cletus' redneck inbred family…. You'd have to get rid of basically the entire show to not find any stereotypes

Goddammit, this still pisses me off beyond belief.

This Indian character that's a well-meaning stereotype in a world of (even worse) stereotypes is offensive. Why? Because the guy saying so also happens to be Indian, therefor his dumbass, nonexistent points somehow hold merit… He was one of the best characters on the show, beloved both in-universe and by fans. There was even an entire level dedicated to him in Hit n' Run for Christ sake.

The major thing that should be taken away from this is how far on the other side of the "This is offensive" spectrum it goes. In the way that someone will be "offended for" someone else of a particular group that doesn't find it offensive, just because they're part of that group, doesn't mean it's actually offensive.