I only skimmed the ruling, but it sounds like this was not simply because they used American Indian imagery. It specifically discusses previous rulings along the lines of what you're suggesting, and explains why they chose not to cancel the trademark in that case, and why that precedent is not applicable in this case.
Long story short, this isn't about simply using ethnic imagery. It's about using an out-and-out racial slur.
But that's a wrong-headed assumption. "Red-skin" is not a per-se slur, its a translation of a french phrase, and that was apparently derived from orginal native american usage. The latter referred to "white men" and "black men". Nobody is arguing that the native americans object to the french term "peau-rouge" ? or are they? Just curious on the data.
The team's name was based on a derogatory term, but their logo depicted a native american man that was drawn semi realistic.
The Cleveland Indians literally use a cartoon caricature a Native American with red skin and a questionable facial expression: http://en.wikipedia.org/wiki/File:Cleveland_Indians_logo.svg