Avram,
1. By making pidgen German into a holy language one is snubbing Sepharadim.
2. In some contexts “Jew” can indeed be a pejorative. For example, by using it in place of “Jewish” (e.g. Jew food). At one time, in fact, the polite terms were “Hebrew” and “Israelite”, both of which are more accurate as a Jew (Yehudi) is someone from the tribe of Yehuda. Rav Kook, in fact, never used the word “Yehudi”, always “Yisraeli”. BTW, interestingly, the word “Zhid” is considered a pejorative in Russian (the polite word is “Yevrei”) but a polite word in Polish (when Khruschev came to Russian-occupied zone of Poland at the beginning of WW2 he was shocked to hear Jews referring to themselves as Zhidi).
3. Which Chareidim? What about Sephardic Chareidim (and FYI, Rav Ovadia said that Ashkenazim should junk their galut pronunciation of hebrew already)? Chareidim do not integrate because they do not want to integrate.