I don't quite see the reasons for Americans, Canadians and - especially - American media to feel offended. But, true, the Olympics is not in Europe, and that fact should be taken into consideration, I agree. I know I would follow the rules. Just as I would put on a burqa if I were to stay in Afghanistan. To me it's the same.
With respect, these issues are not the same. Wearing a piece of attire, even one that is sexually oppressive, in order to fit into a society with acting as a visitor is entirely different that attempting to provide a representative demonstration of a cultural act or tradition.
Please bear with me, but I speak from some experience as an African-American on this subject. The reason that this is a sensitive topic, particularly in the western hemisphere is that virtually every nation in the Americas was founded on the basis of either slave labor or deliberate usurpation of land from indigenous peoples by foreign powers or a combination of both.
Regarding black or brown-face characterizations by people of a different race, the sensitivity lies in a very specific cultural and historical period. For some time until almost the mid 20th century, when darker skinned minorities were being portrayed in theatrical performances, the roles were very often played by whites in dark make-up. Aside from depriving racial minorities of opportunities to pursue work as actors, the portrayals themselves were often exploitative caricatures of minorities that traded in the most offensive stereotypes. Even once actual minorities started getting the roles themselves, rather than white actors, the caricatures remained. Millions of people in this country and Canada who lived through that period are still alive or were taught about it by their parents. It's so offensive that to event attempt it in public is just a non-starter. So to see it attempted, pure intentions or not, in an ice dancing routine is beyond shocking to a lot of people who think those days are long gone.
To prove my point see how an American singer acting as a guest judge on an Australian variety series reacted to a black-face Jackson Five routine perfored by a group of contestants.
http://www.youtube.com/watch?v=4DhNJsU2N6Q
As you can see, the cultural residue of these occurrences is still being dealt with across both continents today. There are deep emotional wounds among many racial and ethnic minorities and whites in the Americas that something like this just causes to rise to the surface all over again.
Add that to the fact the Australian Aborigines were virtually wiped out across much of their own continent and it does not take a rocket scientist to see how there might be some feeling of solidarity among a North American audience with the people D/S are attempting to portray. The concern among minority groups and their supporters that D/S's make-up and overall interpretation goes too far should not come as a shock to anyone who lives in this part of the world. Linchuk should be well aware of this given that she has lived here for nearly two decades and raised her daughter here. It's likely one of the reasons the D/W chose to use Indian style garb, but not to artificially change their appearance (i.e. hair or skin color) for their OD.
As far as other skating programs interpreting cultural themes goes, there was a decidedly mixed reaction among American skating fans (casual or otherwise) to A/P's FD at the 2002 games because it used vocals from Martin Luther King Jr.'s most famous speech, "I Have a Dream." Their intent was pure, but they were a bit unaware of how reverently people of all backgrounds in the US view that speech, especially middle-aged people. It's almost sacred. Using it in a skating program was seen by some as inappropriate. In fact, the NBC commentators stated as much at the start of the program. (see youtube) I had less of a problem with it than many, but my mother who is nearly 70 was very offended.
On the other hand, K/O's African FD from 1999, was an attempt to incorporate the dance elements from some African cultures without being over the top with hair or makeup. I admit I was not crazy about it ten years ago, but not because it was racially insensitive. It wasn't. I just favored the more romantic,purist approach A/P took with their Man in the Iron Mask FD. However, looking back at the video, I can admire K/O's FD with fresh eyes and even say I have no problem with them winning that event. It's all a matter of degrees and taking your audience into account.