Nope, I think it's silly to think the word "faggot" makes a song necessarily offensive, especially in the context of the song. The author of the song isn't saying the word "faggot", he doesn't believe the person is a "faggot". The song is in the perspective of a couple of blue collar movers watching the TV who would probably call that person faggot. I don't think it's offensive because it's realistic xD People of that discipline tend to not really care about that stuff, even today, especially in front of there peers.
Next poster is slightly worried that, although things are getting much more progressive and equality is much more accepted (which is awesome!) we may be going into another state of intellectual oppression, where those who do say things like that, are oppressed, and looked down upon in society just as the people who believe the opinions of today were looked down upon a hundred years ago.