It was 100% about the context. Dave used the word in a derogatory, very serious fashion, from a position of power. The word has gotten tossed around so much over the past few years that I think people have begun to lessen its severity, and that's dangerous.
Just as two gay men may jokingly call each other f__, or two black men may choose to use the word n_____ to refer to one another, that's a right that's afforded to them because of their position. At no point will it ever be OK for someone on the outside of that circle to throw these words at someone on the inside.
To be fair, I can't stand any of these three words, and I wish that they'd be completely forgotten from within the English language. But I'm on the outside of all three of these circles, so it's not my place to say what is harmful to those within them.