This does indeed seem like a rather extreme interpretation of Political Correctness. Being a student of Anthropology, and Cultural Anthropology specifically, it behooves me to be capable of not pissing everyone off. However, the changes cited seem to be aimed at appeasing people determined to be offended at you. However, I'm not a good judge of the animosity those words and phrases generate in their respective communities, as I'm not often around them.
I understand, also, the aim of these changes is to alter the psyche through the language. It's less to avoid offending people now than to stop the term "black," or what have you, from having a negative connotation, which ideally will steer future generations from offending/oppressing people in the future. Honestly, I'm not entirely sure it will work, even if our entire population was behind it, though there is some basis in theory.
Anyways, this proposal isn't deserving of outrage. It's just rather interesting.