The question is being asked without context. If you asked, "Is The New Yorker cover acceptable in and of itself?" I would say yes and that would be that. But as the question stands, I think one could actually answer "No" because in this political climate, with an attack dog like "Fox News" lurking around the political alley, something like this will be used to dredge up all the stereotypes all over again.
I can hear Fox and Friends or Hannity now. They'll say the picture is over the top, but that the issues are "real." The chyron will read: "Obama TERRORIST MUSLIM PICTURE: Is it OFFENSIVE?" And they won't mean, "Is it offensive because it can be misinterpreted." They'll mean "Do you REALLY think it's offensive, when it brings up so may issues that 'the American people' have about Obama's PAST?"And that's only ONE way they could use a chryon against Obama with this. There are hundreds of insidious ways to write misleading stuff on a chyron based on that photo.
You think they won't milk this for weeks? Think again. They will use it further muddy the water.
Come on, everyone knows how this is going to play out over at good ole Fox "News."