We had a fair bit of discussion about this before it was added to the censored word list and it's an interesting story - at least from my perspective - how we came to that decision.
A member of the team said, basically, "I think that word gets used too casually on the Boards. It's always an insult and I always feel bad when I see it, but we let it slide. I'd like to revisit it." The immediate response was the old standby argument of how it's synonymous with slowing, hindering or delaying. Resistant to fire was also mentioned. There was some back-and-forth about innocuous uses that occur organically on the Boards (hint: they're really rare).
That's when someone pointed out that the people arguing for keeping it had completely disregarded the "I always feel bad" part of the opening statement. That's when people had the light bulb moment of giving the consideration of peoples' feelings equal time. We talked about how there are plenty of easy replacements with much less pejorative context. We talked about how there are lots of words that people don't realize are offensive, mostly because they don't belong to the affected culture or they're just not popular any more. (If you want an example of this latter idea in action, watch people seeing Django Unchained for the first time. You might be surprised at their reaction to the racial slurs, but that's really just a measure of how much things can and do change.) People missed it, but a couple other slurs or insults were also added to the list. People just haven't noticed because they're no longer in common usage.
After a great deal of heated debate, we came to the consensus that it was okay to add that term to the filter and, if it ever became a problem, we would revisit it. I don't think that's likely, but I could be wrong.
As for masking the word making it more difficult to know what was said, I don't see that as a huge concern. I think people will get it most of the time from the context and there's a benefit to getting people in the habit of just using the synonyms.