Well, it's not trying to stereotype an entire group of people and ignore all the various cultural differences among the people of the region. It's just a generic classification of a region of people with similar traits. Much the same way people from Japan, China, Korea, Vietnam, etc. are considered "asian", or people from Germany, Sweden, England, Georgia, Ukraine, etc. are "caucasian". People from Mexico, Brazil, Chile, Peru, Bolivia, etc. are "hispanic".
They're not meant to imply any connotations, positive or negative. They're just culturlal/haplotypical umbrella terms.
Well yeah, it's a racial topic on the internet. It's got nowhere to go but down.