well, it's meant as a derogatory term.. as in "that's a boneheaded move", and to paint the people who named it as a silly bunch of dinguses..
but yes, it's technically a portmanteau of "Xbox" and "One". So honestly, I think it's a decent moniker, even silly fucking sillyheads aside.
Noone said it can't be degrading at the same time.
Honestly, the first thing you should do when coming up with names (of anything) is figuring out the worst way it could be twisted into a degrading joke.
like, the Wii shouldn't have been called the Wii.. because Wii is a homophone of Wee, or a bit of a slang term for taking the piss.
Xbone is sort of the same deal but WE had to point out to them that you can make an honest portmanteau (not to be pedantic but that means "taking two words and mashing them together") that sounds silly and stupid.. they should have seen it coming, probably did, don't care, so why should we? It's the xbone.