I think that's exactly what he's going for, he wants to make everyone feel as uncomfortable as possible and maybe make you think about exactly why you feel so uncomfortable. I find it's because it all hits so close to the ugly truth. It's a mirror to the ugliest parts of how people can be with racism, homophobia, xenophobia. You
should feel uncomfortable watching that. Remember the rodeo scene in Borat where he got an entire arena to cheer about killing every man, woman and child Iraq? I like that he exposes people who truly think like that, it's gold that he gets them to make complete asses of themselves without them even realizing, like Colbert does.
But it's just so absurd and over the top, and most importantly I know that it's satire, that's the reason I can find it funny. I'll admit I can also see why tasteless isn't everyone's sense of humor though. (sorry for the bruno-festo
)