@XBuzzer,
I tend to work with the social justice definition of racism, which starts at the dictionary definition and then has words added to it depending on context. To me, racism at home with its feet up has a simple definition. Then when you add institutional power (which in this case would be by being white) or societal expectation (both of which influence the original definition, as I understand it) is when you get racism with societally-approved teeth.
Let's take, er, cracker as an example. It doesn't hurt me because there's no personal history that involves people using it as an insult to me. Even if there was a group of bullies that harassed me as a child and used the word in conjunction, that's still not socially-approved racism. It's just a bit of a dick move by some kids. If the opposite occurred, it would be both a dick move by some kids and socially-approved racist behavior which shores up other nasty shit - which makes y'feel horrid.
I would like to keep the plain definition of racist in existence because I don't see it as a useless definition. There's also that I see the word as being involved in all the different bits (societally, structurally ect) of racism and I think its existence helps encourage that kind of 'acknowledge it dammit' conversation. Tiny r racism is in all of the institutionalized, socially approved, swaggery racism and I think it is hazardous to drop that definition because the end result seems to showcase that only socially approved, large scale racism 'matters'. It both lets people 'get away' with everyday banal racism because what is a lone individual going to be able to do, really and it also encourages the belief (at least in the northern usa) that the only racism that matters is racism on a large scale.
The guys on the corner where the movie theatre is with a microphone hate everyone but their own tiny, tiny group of individuals and I consider them racist as hell. Not because they used slurs or names in their screed (they didn't) but because of the views they espoused, up to and including forced servitude of everyone but them because....reasons, apparently. No idea what their race was. Pretty sure they weren't white but I don't know what they identified as and they loathed...a hell of a lot of groups in their screed. While white people were on the list we were far from the only ones.
I think the word racism (like the rest of the words that have a basic definition about -ism) can still be useful, particularly when I notice that someone is doing something randomly nasty because they think something bad about a racially coded characteristic someone else has (or is perceived to have) and see an opening to make their life just a little bit more miserable. I suspect it happens a hell of a lot more often than people let on. I suppose you can call it horizontal hostility (since it usually happens between people who both have an end of the 'there but for the grace o'god go I' stick, even if it's different crappy ends - race and class in an instance) but that doesn't really capture what the issue is.
I've a suspicion there's a lot of those kinds of people simply because I see a lot of them myself - people who, at a guess, are only on an axis or two of privilege and gripping it with both hands and they get pissy, shall we say, of someone that they perceive gets something they don't (despite them not needing the same service) - I lost count a long time ago, for instance, of how many people think it's fine to quiz someone to make sure they're 'really' disabled and deserving of whatever meager service the toothless ada law gives. And half the time it isn't even a quiz, it's just an insistence that you don't need or deserve the same accessibility that such and so has. So no, I don't...trust, I suppose you'd say, the idea of getting rid of the everyday banal definition of racism since it would let John and Jane Doe off the hook. Ableism isn't exactly a household word and that's what we've got going on - I don't see how it would be different if racism were phased out to mean only institutional. Sexism is currently where racism is at with regards to word usage and institutional and people have been trying to get others to stop referring to sexism in situations not institutional for decades. It lets people pretend there isn't much of a problem anymore.
As for your last paragraph, that depends - are you in the north or the south? Granted, they both suck but culturally they're quite different with the acknowledgement of racism. The south is actually much better at it because in the north when someone uses the word racism they only mean institutionalized and done by no one they know because they're 'Good People'. I agree with the banning of slurs, the difference is I don't think a mere banning is going to deal with the underlying problem of who made the words and why.
