I won't get into whether this particular name is offensive or not, but both Shadow Wizard and Rosinante seem to be of the opinion that this is 2012 and not the Victorian era, and so such words should be overlooked. While that stance can be justified in chat/speech/private lives, etc., I believe that if you're asking and answering questions or leaving comments around with your name attached to it, then it is better (and I would go far as to say make it a policy) to not have any objectionable/vulgar content as your display name.
Let's be sensible here. Your display name is also used by others to refer to you and your content. As such, even if the whole "It's just a word, what's the big deal? Get over it" argument holds in isolation, by forcing others to use the same, you are offending them. For example, you can set your display name to
cunt face, and it doesn't have a target and hence, is not offensive by Shadow Wizard's reasoning. But everyone is forced to refer to you as
@cunt face or
@cunt or write things like "blappity blah and you can also foo the bar like in cunt face's answer...".
Although you can change your display name later to something more reasonable, it won't change the text in the comments or in the answers. As such, any and all context to any of those statements is lost and this makes SO/SE look less like a civil and polite society and more like a teenager's chat history.
There is a place for reasonably vulgar words used in a non-offensive, targetless manner. That's in your profile in the "About me" section. You can write "I hate this fucking job" or "This has been a shitty month" or "I'd rather be eating shitburgers than answering n00b questions", and I don't think anyone could care less about it. Welbog's profile is a good example of that.