Actually, there are more than two choices...
Pinecricker
...a third option might have been for Obama to realize that he stepped in it, and to admit that he offended quite a few people. Then, apologize and explain with more clarity what his original point was. The issue would have passed in the next morning's news, making it a non-issue going forward. His critics would have been disarmed, and he would have had a clear conscious after apologizing. He might have even regained some respect.

The fourth option, which was to what most Obama supporters actually did, was try to defend a stupid remark in a condescending and flimsy manner, giving Obama's critics even more ammunition and ensuring the story was drug out in the news for an extended period.

The context argument just doesn't work here. His remarks were harsh enough that they just don't reconcile against the rest of his speech.
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