Doesn't make a lot of sense to me to respond to 'I don't want to deal with their bureaucrats' with 'You do realize that's an insult, right?'. Yeah, he realizes, he is clearly trying to be insulting. It's only an insult because of that intent, in fact. A lot more sensible if the intent is to suggest that the word ought not be used because it is an insult beyond what is acceptable in polite society, which is the much more common usage of 'slur'.
Not to say it's impossible you're right that it's being brought up irrelevantly, but I do think the odds are on my side and I further think it would be worth writing a sentence calling that out even if they weren't.
His point, I assume, was that many people insulting beurocrats think that those are somehow seperate from the people they elected i.e. it's not some unidentifiable blob responsible for these things but the person /you/ voted for. At least that's my charitable interpretation.