Do you find the term 'half caste' offensive?

I was surprised at the stink that the use of the term in a Police Media Release apparently caused.
Mainstream Media in NZ didn't use the term themselves in much of their coverage but the Police themselves issued an apology.

Here's some coverage from Radio NZ News.

A google search suggests that i'm not the only one who's posed this question before now.

Growing up in Manurewa - the middle of South Auckland and a cultural melting-pot of ethnicities and skin colours - I didn't think twice when folks used the term.
So I was surprised at the furore that erupted here.

Good grief folks, is this the PC brigade gone-mad - or is there something to this in your opinion?