The ensuing fight scene is perhaps one of Jackie's best. It is clearly a significant aspect of their culture that Jewish people don't call each other kike. Using words like honkey, chink, kike, nigger, spic, wap, wasp, dago, queer, dike, and so forth is usually done for offensive effect. If the words aren't intended to offend, as one may presume in cases where they are used by those sharing the character trait being demeaned, then the intention is often to identify a shared burden. The question of political correctness is whether it is appropriate to limit the speech of others on account of the words they choose to use being offensive or perceived as demeaning to some.
Political correctness is bad when it is enforced by ostracism, force, or fraud.
It is silly when it is used by otherwise sensible people. However, it is just as baseless and idiotic to call someone PC who isn't using force or ostracism to limit what others say. On the other hand, for Kevin to object to the words being used is just another use of free speech. People don't have to be nice to each other. On the other hand, if they aren't nice, they should expect reciprocal treatment.