Harry Reid's remarks were racially insensitive and a mistake for someone of his stature. I can't really imagine Reid saying, Well, Bill Clinton's southern accent wasn't too redneckish, so... (Clarifying... I haven't really heard anyone talking about the political advantages of a toned down white accent.)
But he shouldn't be forced to retire because of it. On the continuum of racially insensitive remarks, this one was very, very mild. Speaking of which, it was bizarre to watch Pat Buchanan on Morning Joe today commenting on the quote. Pat Buchanan who once wrote, "America has been the best country on earth for black folks." Yeah, we're going to voice our Morning Joe outrage about Harry Reid by hosting someone who called Justice Sotomayor a "quota queen."
I agree with Markos, that Reid should be forced to retire because he's a weak Democrat and probably won't win in November. So he should get out of the way and allow the Democrats to run a stronger candidate. The Dodd Effect. Meanwhile, Reid doesn't have a history for racially insensitive statements, so it all seems overblown and certainly not grounds for resignation.
(Edited for clarity)