No, I don't think it's funny at all. I find it offensive, but some of the reactions are pretty hilarious, like greenpanda's.
Still, I don't think they should be suspended. It was an off campus party. Sure it offends me to hell, but what am I going to do? The best way to counter act such things is to stop doing them or act more responsible. But then again, I do love me some fried cheek-in.