I am lucky enough to live in a place with a large community of fellow comedians (relative to the city size) as well as proximity to Atlanta, one of the top three or four comedy cities in the country. There's been a bit of drama recently mirroring some of the controversy on the national stage in the past few months regarding "the line" over which comedians cannot cross.
Briefly, a group of people in town are organizing a comedy show that purports to be "anti-sexist" and "inclusive". This is no doubt a response to the fact that the average amateur comedy show / open mic night is filled to bursting with borderline (or worse) jokes about race, gender, sexual orientation, rape, masturbation, and so on. There are a lot of reasons for this. First, it's easy. Budding comedians learn quickly that "bathroom" humor and playing to stereotypes is like a crutch. Why? Because second, people laugh at it. Remember the kind of crap that is popular in this country; whether we're talking about books, music, movies, or comedy, people tend to like lowbrow, hacky crap. Third, one of the pillars of comedy (of which there are four, and that's a post for another day) is transgressing boundaries. People expect to be shocked a little, to have a few "Oh my, he did NOT just say that!" moments. Fifty years ago when married couples on TV slept in separate beds it was easy to shock people. Lenny Bruce was thrown in jail for saying "fuck". Today, with regular network TV laden with people murdering, swearing, and blowing each other for drugs, it takes quite a lot to shock people. This is directly responsible, I believe, for the recent explosion in jokes about abortion, rape, and other similar subjects. It's just so hard to shock people these days, comedians keep going farther and farther trying to do it…
There's definitely a line. People cross it. Tracy Morgan (who, according to the tales I hear from touring performers, really is the biggest asshole on the planet) did. Michael Richards did. Lots of people you've never heard of (and never will) cross it on a nightly basis. In the past few months in my small city alone I've seen:
1) A 10 minute act about how Asian people talk funny consisting of…a man imitating the way Asians talk
2) Entire sets of rape jokes
3) A half-dozen frat boys in backward baseball caps doing whole sets of frat boy humor, i.e., women are stupid bitches, and it is funny what stupid bitches they are.
4) Gratuitous on-stage use of words like "fag" and "nigger", sometimes by people who use such language regularly and sometimes by people who would never speak that way offstage but want to be "edgy".
I don't have the slightest doubt that people walk away from these shows offended. All of the preceding said, I think having a night of PC Comedy is just about the worst idea ever.
I have no way to reconcile the opposing realities that, A) people have a right to be in public spaces without being belittled, singled out, or demeaned, and B) comedy doesn't work if you give people a list of things not to talk about. The only way to push the boundaries and come up with something new is to push the boundaries. Performers have to use their own common sense in doing so. I try to do that by asking myself why, not merely if, things are funny. If you say "fag" on stage, is it funny because "Hah! He said 'fag'!" or because the audience is supposed to realize how idiotic people who say things like that are? Be honest with yourself when you think about what kind of laughs you're getting. Sometimes I worry about this. When I say that I love the War on Drugs because it's so good at filling prisons with brown people, 90% of the crowd will laugh because it's sarcasm pointing out an uncomfortable reality and social problem, 8% will be offended, and 2% will laugh because, yeah, brown people are all gang members. I can't control that. And I'd rather accept the downside than tell a bunch of jokes about airport security and TV dinners.
From the audience's perspective, when performers cross the line don't get cranky about it if you're not willing to let them know. Boo them. Tell them after the show "Your 10 minutes of rape jokes were horribly offensive, you hack. Too bad you can't make people laugh without going there." Live performance is a process of elimination – don't feel bad about pushing people who suck at it toward the exit (or, more optimistically, pushing them to think harder and come up with better material). Alternatively, you could decide that you're not going to get offended over comedy. That's not easy for everyone to do, of course, because "It's just a joke!" is the Tucker Max Defense, which is to say it isn't a valid defense when people cross the line. Being offended is a risk we accept when we agree to interact with the world, though. Don't let it keep you home. On balance you're better off being offended at Open Mic Night than sitting at home watching G-rated comedy from, I don't know, Sinbad.