I just saw this for the first time (thanks Slate) and I was totally flabbergasted. After reading some of the reader commentary it seemed pretty clear that this cartoon (Coal Black and the Sebben Dwarves) was entirely racist.
But then I read the wikipedia article. It made a couple points of which I was unaware, which really put the cartoon into perspective:
1)It was made during wartime, and not for children (aka it was propaganda). This explains why the queen is hording coffee and sugar and tires, the anti-Japanese comment, and all of the army references.
2)Duke Ellington was one of the people who suggested an all-black musical cartoon to Bob Clampett and co.
3) It was one of the first cartoons to have black cast and crew involved in the creation. Dorothy Dandridge's mother and sister (popular radio actresses) voiced some characters.
4) The use of extreme stereotyping and absurdity is a common staple in cartoons. Think back to any Disney movie you've ever watched. Generally the male and female lead look pretty normal (if attractive). The supporting characters are often either ridiculously tall or short, or fat or thing, or strangely colored. So on and so forth. Bob Clampett used "darky iconography" a popular visual vernacular of the time, in the place of another extreme.
For the record, while I'm not saying that it isn't racist (it clearly is), but that it's clearly a product of its time, and within that context it is fascinating. It's a great historical document, in addition to being a great cartoon. By great I am referring to the direction, music, and skill of imagery, rather than the content itself.
If it were about Jews, would I be offended? Yeah. And that might hurt my ability to objectively judge the quality of the cartoon, or its historical importance. But that doesn't mean that it is valueless. Plenty of things offend me that have great value.
If you want another view of this, read Milton Gray's essay on the topic. He deconstructs the cartoon and gives some interesting background information.