Yes, but that doesn't justify being inconsiderate of western sensibilities.
Eh I don't really agree with this - especially in the context of a fan translation which doesn't have to think how much the final product is marketable. At the end of the days here we are talking about a 1994 game made for the Japanese domestic audience. A translation, I think, should be a "layer" to help the English-speaking community understand the original work without altering the content (that's very theoretical of course, as every language is deeply connected to its culture - more pragmatically, "altering the content as little as possible"), letting it shine for its merits or (in this case) fall for its own faults.
At the same time, what Univbee said regarding how faithful a translation can be is very true. I don't speak Japanese (and indeed English isn't even my mother tongue), but taking for good what he said on the nuances of the original Japanese word...
It's definitely not a nice term but it doesn't have the underlying "I think you're subhuman and would murder you if I had the chance" that the word ultimately used has. It reminds me of a mostly-solid English fan subtitle file for a French movie where a white "ghetto-like" guy used a French term that was basically like "brutha" but the fansubs outright used the N-word. The translation is accurate in terms of meaning but not in terms of severity, which is an important distinction.
Even if you're trying to be super-faithful and not "localizing", there's still a lot of nuance when translating, and even bilingually-raised professional translators with decades of experience get it wrong sometimes. Translations can be products of their time, too, two "perfect" translations done decades apart could differ significantly because replicating the mental feeling of an original work in a translation by necessity is subject to societal changes. I don't even mean in terms of political correctness, I mean in terms of everything. If there was only one correct way to translate something, Google Translate would have been the go-to for translating since a decade ago.
... I think the criticism should have been along the lines of "Look, your choice of words here doesn't really convey the original meaning, making the phrase more offensive than it was in Japanese", without implying a) bad faith on Tom's part; b) the need to "sanitize" an old game (which as said isn't what a "pure" translation should do IMHO. Of course it would be apt in a ROM hack with another focus - that is, free a good game from its problematic elements).
