Cultural appropriation of Mexican small shops. Note that I don't really see the issue, the name describes their business well.
Nearly everything (especially having to do with food) is a cultural reference of some kind -- nothing bad about that.
And a lot is not very authentic and may count as some kind of "appropriation". That's not really avoidable when cultures mix (as they do in the US).
Maybe it has more to do with economic competition than cultural sensitivities?
I don't get how the name is a problem, other than it being a little too accurate.
The name being too accurate falls into the stereotypical Silicon Valley trap of cheerfully "disrupting" with negative consequences for "regular people." Not only does the product ostensibly challenge the economic security of bodega owners, they're using the name of their livelihood to brand their own company. So the name becomes an extra sore spot. It's insult to potential injury. It's banally Orwellian, in the Ministry of Peace sort of way.
Markets are brutal sometimes. This still seems to rank pretty low on that scale. For a long time competition was looked at more like a non-violent form of warfare, and this wouldn't even register. Now, I guess we have a more cooperative view of business (or perhaps some people have just never been in business and don't know), so they should be sensitive to the plight of their competitors.