After watching this develop for a couple of days I think there are some strong overreactions on both sides. Now before I go on, I just want to say I'm not trying to take a 'centrist' view here; PewDiePie was wrong to say that word, he should not be defended for saying that word, and he should issue an honest apology for saying that word. It's not appropriate or a show of good character to say, especially since he has a young, impressionable audience.
However, I think people are looking a bit too far into this. I've seen people very quick to denounce PewDiePie as an irredeemable racist because of this, and I just have to disagree. Now I don't watch his videos or know him personally, so I can't say I can be an absolute judge about this, and that goes both ways. However, I do know he has met some controversy over a tasteless Jew joke prior to this. Still, just because someone says a bad (albeit racially charged) word or makes a tasteless joke doesn't immediately make them racist. Is it childish, incentive, and inappropriate? Yes, absolutely. But the 'joke' behind what was said about the Jews was not PewDiePie laying out his anti-semetic viewpoint on Jewish people, but rather a "hey, let's make people who can't read English say something horrible." Once again, tasteless and immature, but I don't think worthy of a racist label. Same goes for this slip. Totally inappropriate and completely wrong of him to say, but I don't think his entire viewpoints on race should be judged by something of this caliber. It's not like JonTron who went on those utterly vile Twitter rants that clearly outlined his backwards politics and drew some serious question to comments he's made in the past. All in all, I don't think people should be so quick to assume the absolute worst about PewDiePie; I know this is a great opportunity to do so - especially if you're not a fan of him - but some of this outrage has really been blown out of proportion to what he said.
Same goes to the other side who are defending and attempting to justify what PewDiePie said; it's completely unjustifiable to say (which is why I've been dancing around using the n-word outright), and those who are trying to make a point by using it casually or calling critics of PewDiePie that word are being even worse and just contributing toxicity to the larger gaming community. It's not "just a word" and just because you say it all the time when you're angry doesn't make it okay to say ever. The history of the n-word should not be glazed over and made casual "just because rappers say it." Context is key, and PewDiePie used the word in a derogatory way. Not one that any solid political positions on race (other than insensitivity and unconcern) can be drawn out from, but a terrible word to use nonetheless.
If anyone is angry over this, I'm not trying to say you don't have a right to be; you absolutely do. Like I said, PewDiePie is in the complete wrong here. But I think it's important to accept that sometimes people just fuck up and do something or say something that they should not have. Although words and actions can and should be used to judge one's character, it is important to do so proportional to the offense that has been committed. To me, all this shows is that PewDiePie is an insensitive asshole who contributes to toxicity in gaming, but attacking his character with claims of him being an irredeemable racist is going a bit too far in my mind.