I think people are upset by the concept that 20+ years in coaching with no apparent issues and one regrettable statement, which would appear to not have had a racist intent, can get someone unfairly labeled. I can understand that being troubling.
I just can't figure out why something like that even gets to the press. He said this, he apologized and it appears those who are in a position to be truly hurt by it accepted the apology. That's really how it should work.
My favorite part of all this is how the policing of language isn't actually helping provide more opportunities or equality to all of the various and obviously discriminated-against groups in our history. Firing Greg McDermott for saying this isn't going to make the failing public school system in inner-city Milwaukee or in some poor town in Appalachia any better. But our society likes the cheap, easy, and symbolic compared to the hard work and real sacrifice it would actually take to fix these things.