I find the term "nigger" to be offensive. But, it is a historical story. He called his dog "nigger" then he called his dog "nigger".
The fact that he called his dog Nigger suggests that the term wasn't considered a derogatory racial term back then. I mean, who would name their dog after a racial slur, or any slur for that matter? Would you name your dog Gook, Spic, Fuckface, Cunt, etc?
Nigger (slight adaptation from niger) historically meant black , I know Russians who still refer to blacks as niggers in a non-derogatory manner, the word has just been demonised by all the political correctness bullshit over the years and the fact that the South (who used the word more often) were often associated with racism and slavery.
The day when niggers aren't offended by the term nigger is the day when racism is not longer such a pertinent issue. Let's hope that day comes soon.