It was an incredibly stupid metaphor to use but I don't think Obama intended to call Palin a pig.
It's a common phrase. This reminds me of something that happened on NU. A ROC poster threw out the question "Have you stopped beating your wife lately?" after an LOC asked a loaded question. The LOC poster went ballistic saying "HOW DARE YOU BRING MY FAMILY INTO THIS???!!!!!!". There was a callout in the Fight Club. It was crazy.
The thing that bothers me about this strategy is that, it is starting to sound like "hands off the girl". It's like the right taking a page out of the lefty book, let's look for offense anywhere we find it.
There is a lot for the McCain/Palin campaign to be upset about, with regard to the crap about Palin's family and even going over all the expense records with a fine tooth comb, but this phrase is not really one of them.
Now I'll argue out of the other side of my mouth.. 
Apparently with FOX and others picking up on this, it could be a strategy that works. Because it is a play straight out of the lefty play book, it's hard for them fight against it.
if the roles were reversed, and john mccain had made a lipstick on a pig comment 6 days after hypothetical democratic vice presidential nominee hillary clinton had made a lipstick remark in reference to herself in a major, nationally televised speech, what do you think would be happening right now?
yep. national uproar. allegations of everything from sexism to pigism (

). a call for john mccain's head on a pike. 2 weeks of MSM outrage. look, politics ain't always fair. I say run with it.
not to mention the fact that The BarackStar!'s "sweetiegate" remarks, and his observation that hillary might nuke pakistan because she was PMSing, all give the broader conversation a bit of resonance.