I've seen plenty examples of white southerners getting sick of people referring to them as hicks and rednecks because of their accents and other aspects of their culture. Don't pretend that it's just minorities that get offended by stereotypes.
Why was the BSU upset? I don't know. It's not as if media makes it seem like the bling culture is the majority of black youths and the members of the BSU probably don't like being associated with a culture that presents itself in that fashion. I'm shocked SHOCKED that the BSU was offended.
It's 2006, I think it's pretty easy to tell if something has the potential to offend people. It's really not that hard. Therefore, if you can tell that a theme might offend outsiders, why go through with it? It's about being a conscientious human being and trying not to do things that will offend people. Sure, maybe the BSU was a little thin-skinned here and they suffered from sandinthevaginitis but the fact is that it should have been easy to see that the party might offend people and to just do it anyways is dickish.
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