Maybe you skimmed over all the pictures in this thread of him talking like a stereotypical 70s black man. He's the only one who talks like that in the game as far as I know. There is an original arc dedicated to his character, but his general mannerisms and way of acting is definitely shitty. It's obvious that stuff could have been handled way better.
Maybe you skimmed over the fact that his dialogue was the result of the NA localization and not something the Japanese side of Square decided on.
All they have to do is remove that kind of speaking, which they've already done with his subsequent appearances (AC, Dirge, and from what we've seen the Remake won't have it either). With that gone, what else makes him offensive?