I had a friend who was married to an Irish chap - and he introduced himself to me as 'Paddy' (his name was Patrick), even his wife called him Paddy. Maybe we're back to context again.
The Aussies have a joke they like to tell in front of British people as they did to my brother when he arrived in Australia: how do you know when a plane load of pohms has landed? When the engines are turned off you can still hear whining. Was my brother offended? No, he laughed because he thought that was quite funny.
Whilst it should never be acceptable to insult people because of the way they were born, I do think some people see insult where none was intended and most people, once it's pointed out, will cease to say it.