I think it is completely unfair for you to call people's sensitivities "pathetic" when you yourself are not subjected to the same sensitivities. The offense comes from the fact that the initial grouping was done by oppressive or elitist cultures to categorize cultures they dominated and/or felt superior to. For example, "negro" doesn't really carry any negative meaning as a word, except that it was implemented as a way to describe black people by their oppressors.

Being a white Englishman it is no surprise that you are deft to the idea that using these labels can rightfully cause great offense.