It was labelled as racist and sold through the news. Many people felt that xenophobia aftertaste. The message was designed to make you feel that way.
You don't remember when the sitting president called it "kung flu"[1]? I don't need a newspaper to see the xenophobia in that.
That's xenophobic... how?
Put another way: it takes our laziest view of a ethnicity and uses it to make light of a disease that we think came from there, one that everybody is unhappy about. It doesn’t take much to see the latent xenophobia in that.
TIL that there were "German measels", in Germany we just called them "measels".
In other words, it's not German and it's not measles. Hopefully a lesson in using this naming pattern for diseases...
Also, it's worth actually reading up on why we called it the Spanish Flu: our allies in WWI originally called it the "American Flu," but changed it to avoid offending us.
Edit: it's also worth nothing that (1) "Kung Flu" is significantly different in content from "Spanish Flu," and (2) it doesn't have to be the case for anyone to be offended for xenophobia to be wrong.
The current issue aside, racists and xenophobes basically always attempt to evade responsibility by claiming they were "only joking". Such claims should be tossed in the trash bin where they belong. First, it's not a joke, and it's not funny. Second, they're lying...they didn't intend it as a "joke" and don't really even understand what a "joke" actually is, for the most part. And third, it's not relevant whether it was a joke or not.
The west sucked this up and any mention of china in any capacity got you called racist.