This bit is disgusting, but not in the traditional sense. It's disgustingly truthful(and racist), and only Louis can bring it up in a light that is both humorous and acceptable. His playful tone and mischievous smile allow him to poke fun at basically anything he damn well pleases, a luxury many comedians seek but few actually enjoy. He truly is a rarity in comedy. His explanation of the first Europeans landing in America and slapping an incorrect label on its inhabitants is funny enough to drive any objections on its racism out of our heads and enjoy the joke for what it is: a joke. Many of Louis's jokes straddle that line between acceptable and totally uncalled for, but the difference between him and other, less talented comedians is that he is able to stay on that line. He never tips one way or the other, whereas many other comedians fall into the trap of stepping too far over the line and subsequently earning the scorn and disapproval of the crowd.