I see that, in an attempt to diminish the power of the nigger word, some black people use it as a badge of sorts. They make it their own in retaliation. I think everyone should have the ability to say whatever they're going to say without having this looming feeling that someone is going to object to a certain word, just because it's a stigmatized word. If someone is incorrect, it's a different story.
So, does the problem lie in the incorrectness of nigger? I don't think it matters. Someone can call me honky, and I'm ambivalent because it's TRUE! I'm a honky. So what? I think people should be able to call me a honky, and likewise, I should be able to call people niggers. Or, if you like, you can call me a nigger. I don't care. These are just words. They're already in our vocabulary, so why do some people get special rights to specific parts of the dictionary?
So I suppose the problem lies within the context. Someone who says 'nigger' is denoted as racist, regardless of whether they are or not. So, people should be more attentive to the context than the word itself. For instance, if a white man were to be genuinely racist, and support racist ideals, then black people have every right to be upset; because that man is indeed racist. However, by and large, the western world is not racist. It's only racist when someone makes it out to be, and that can be said for whites and blacks alike.
At some point, you construct your own turmoil by giving words too much power over you.