At rock bottom, I just think it's all very dictatorial to denounce somebody in such an extreme fashion for writing a few stupid words in private. I'll argue with people screaming out about the 'evil Zionists' until I'm blue in the face, and I'll do the same to anyone trying to paint all Muslims as wicked and evil. I've known enough people of both persuasions to know it's false and you can extend that attitude. But I won't write off my Turkish friend for painting Israelis as evil monsters any more than I'll write off my Israeli friend for believing that Israel doesn't have any other choice than to retaliate against Hamas in the knowledge that civilian casualties are unavoidable.
Going a bit further and referencing the outrage at the use of the word 'banter' in the LMA's statement to the two texts. I think this is worthy of some more thought. Fans of football clubs regularly hurl abuse at each other because of what football team they support. We hurl abuse at Ipswich (or Ipsh1t as it's more regularly known in glorious Norfolk) even though we know they feel strongly about it and they hurl abuse back and it's all just in 'the spirit of banter'. Yet, at the end of the day a police presence is regularly required at football games to stop things getting violent because fights will break out between football fans. Football fans have actually been murdered after a game, managers of football clubs have received bombs in the post, yet it's accepted that people can be abusive of somebody else's football club as 'just banter' in spite of the uglier side of the tribalism that it is a part. All of those actions are utterly irrational for the sake of a game of football, yet we're all still prepared to accept that things that are said that are cruel and unjustified can actually be meant in good spirits, and even if they're not actually meant in good spirits they will still be tolerated. Ultimately, a distinction is made between the use of abusive words and violent behaviour even though the tribal instincts at work here are no different at all to the ones that drive racist attitudes.
The parallels with racism are obvious. Why don't we like racism? Because it's used to bully, humiliate and even justify killing of people for the sake of the colour of their skin, or the slant of their eyes, or their religious beliefs. And yet, for some reason, despite the parallels between the phenomena, it's considered reasonable to condemn people utterly for anything that so much as hints towards being racist as severely as if they'd stood up and said 'I think all Jews/Muslims/Scots/English/<insert any other tribe, race or faith you want here> people deserve to die'.
It's considered utterly unacceptable to dig at someone else's religion or origins whether it's meant to be good-humoured or not, because somebody 'could find it offensive', even if the recipient doesn't. Case in point, Prince Charles a few years back, who's a regular advocate of tolerance, was found to regularly call a friend of his of Pakistani origin 'Sooty', which the friend took in good humour and went as far to actively defend Prince Charles in the press when it came out. Yet it didn't stop the lobby groups and many others condemning Prince Charles for it, because they didn't deem it acceptable speech.
And this is the problem we have in our society today. There are differences where political doctrine dictates that we must behave in a way that denies there are any differences, and anything that is said that refers to it and somebody finds offensive is unacceptable. And people are out there trawling for anything they can seize on to deem offensive. That is not a healthy society. A healthy society would be one where somebody can tease somebody like that and the recipient tease back, or say 'that's not funny' and the person doing the teasing apologise. Because ultimately, none of us are machines, we're human beings, driven by emotion and irrational leaps as much as we are reason and to attempt to confine that in a strait-jacket of a tabboo subject is repressive and as damaging than what it attempts to resolve.
That all said though, if Malky did indeed regularly refer to one of his players in front of the others as the 'little Egyptian' then that's wrong, even if it was meant in good spirits, because he was in a position of authority over the recipient was in a position where he would worry at the consequences of any retort and he needs to have a good think about that.