It's a bit absurd to be angry at the game for this. The characters are trying to hurt the character, and they are trying to be cruel. IT IS THEIR FREAKING JOB. It is practically impossible to make a game where no on is offended by an insult, but this is one of the more silly ones. You don't see fat people rising up against the fat insults do you? well maybe you do, and if so then they are being just as ridiculous.
It is a game for fun. The characters attempt to insult the protagonist, and do it in a very comical way that still provides plot to the story. We didn't know her origins before it was mentioned here (at least not for certain) and even if you do take them seriously, THE CHARACTERS ARE EVIL. I'm terribly sorry if you are offended by villians being villians, but in that case you should be exposing your kid to games anyways, or movies, or TV, or books, or comics, or music, or the ENTIRE WORLD.
Seriously, the jests are made in a game that is as lighthearted as it is dark in the most brilliant way since the first. Stop trying to be offended.