I may be a bit late in weighing in, but a number of people in objecting to this week's New Yorker cover have worried that, while the image's satire may be evident to the magazine's erudite readership, it may be lost on others. Jason does so here; Wolf Blitzer, much more stridently, says the same.
It's true that, in a different context (on the cover of the National Review, to use Jason's example), the image would be horribly offensive. But if the image appeared on the cover of the National Review, wouldn't it mean something fundamentally different? The satire is a bit too literal for my taste, but it's hard, given the context, for me to take offense. Why would The New Yorker tailor its content to the prejudices of people who don't read it? Isn't it safe to assume that the ten percent of Americans who believe Obama is a Muslim would never have read this issue of The New Yorker if the media hadn't decided to make such a fuss over its cover?