Consider the legal concept of the hyper-sensitive plaintiff. This is a conception in the area of tort law. The term "battery" means an unwelcome or offensive touching. You can be sued for touching someone in an unwelcome or offensive manner. You can be liable for doing this.
However, giving someone a friendly pat on the back can never, as a rule of law, be a battery. Even if you come across a victim (plaintiff) who has, say, a rare bone disorder where all his bones shatter at the slightest contact. This person could be seriously injured by a friendly tap. In this specific person's unique case, a friendly pat on the back could cause untold damage and would most certainly be both unwelcome and offensive.
Now, I can't tell that injured person that he can't be hurt by the friendly tap. But the law holds that because the victim/plaintiff here is "hyper-sensitive," the offender cannot be liable.
That is the case here. The vast majority of Native Americans aren't bothered by this. There is no demonstrable harm, as has been determined by federal courts.
There is no argument. The term cannot be said to be derogatory in the mainstream even if the lunatic fringe says they are offended by it. They are the equivalent of the hyper-sensitive plaintiff, and they've already been booted out of court once for their meritless arguments.