At the flailing Kos-wannabe site Red State, they've taken to begging their readers to stop using racist rhetoric.
What is not fine, okay, or within the bounds of the rules, is to use Latino names as an insult. We are speaking, specifically, of "Jorge Arbusto" and "Juan McCain," although it's certainly possible that others are floating out there or may yet be invented. Allow me to clue anyone who thinks these names are funny or clever in to something: racism isn't clever or funny. If you think you've really zinged someone by calling them by a Latino name, that's a pretty reliable (nearly infallible, in fact) indicator that you don't like Latino people.
If you have to tell them that, haven't you already lost?