It's not an offending title in itself. However, virtually all other companies I know of use that title for entry level positions, i.e. for positions that have very little or no initiative. Google's different stance causes confusion among PhDs that apply there, as I have heard from many friends who get irked by the SW engineer title.
Those who care about titles are those that should become politicians. I respect engineers for what they do, not for what they're called.
Well, people look at titles not just because it boosts their ego: They usually show salary range you expect and the job function you will perform. A "software engineer" position's responsibility would differ greatly if you are applying to, say IBM Research or HP Labs as opposed to what Google takes it to mean.