I think one of the issues at the time when watching it as a kid (remember there was only 3 channels) was as a kid I didn't get that the joke was on Alf - I only understood that when a little older and watching repeats that I was laughing at Alf, not with him.
But all the white school boys at my school took all the names used by Alf and in Love thy neighbour and flung them at the 10 black / Asian kids amongst 1,500 pupils..
I doubt school kids today will be watching it but the last thing that needs stirring up on the playground is a brand new generation of kids imitating the language used back then.