You know how Batty's gonna respond to that.
Seriously, I think the use of that term can be gauged. If it's used offensively, fine, warn or ban. If it's used humorously, maybe try to see the joke. If, for instance, someone I knew said "Ah you listen to those ***gots Marillion" or "What would a *** like you know about grindcore?" I would take precisely zero offence. I think the relationship to the person using the "slur" and the one used on, the intent and the foreseeable circumstances should all be taken into account. In the case of either of the above, can anyone see the likes of me running (hell with that: I'm too old to run anywhere!) to the mods to complain of being called a ***?
Of course it's a horrible word (though here we use it as a slang term for cigarettes, which lends new meaning to the phrase "I'm gasping for a ***!") but like all, or nearly all words that cause offence, it's the context, the intent and the potential damage that I believe should be looked at before it's acted upon.