However, I also believe that too much import can be put on the history of a word and too little recognition of current usage and meaning. I dopn't have a problem with it, no matter what the origin. Perhaps it is inappropriate to raise this here, but you mentioned the diversity of interpretations which may be applied to Pakeha depending on geographics. I don't find it offensive so much as confusing because it isn't clear to me what it means. I think this is a very good question to raise.
Ethnic identification seems to rest with the individual and, as such, is fluid.
By that I mean an individual can identify themselves on a number of levels, each as valid as each other. At the micro-level, one might identify himself as Veronese, the other as Sicilian. So, if ethnicity rests with the individual, then it is up to us to decide how we classify ourselves. I am a non-Maori New Zealander who does not consider himself to be a Pakeha. Note that I do not consider the word 'Pakeha' to be derogatory in itself.