Yup. A lot of terms that arise out of efforts to be inoffensive turn out to be problematic because they are instead born out of ignorance. You gave a good example of this, though you might not have meant to. I do not use the term "African-American" to mean black; I have a (white) friend who emigrated from Africa, and I have black friends who are not Africans, and there are plenty who aren't Americans either. (What term do they use in England, I wonder?) Terms should say what they mean and mean what they say.
a side issue