I believe it was an extremely insulting joke, and racist by definition.

The idea of suspending the "master" title is overkill.  Apparently homophones are now subject to social justice outrage.
http://www.dictionary.com/browse/master

As for Dr. Marrus, his Wikipedia entry describes a long and distinguished career.  It's rather late in his life to show racial animus vs. cracking terrible jokes.

A properly groveling apology is warranted and deserved in this particular case (IMHO) - but a moment's foolishness shouldn't send the doctor into permanent disgrace.