I think Letterman is using his barnyard "humor" to feed into the polarized society. The comments on the yahoo website regarding this issue are close to 50/50 with many people saying that it is Palin who is trying to advance her celebrity by overreacting to Letterman's "edgy" jokes.
These same people would be outraged if the situation was reversed. Letterman is not a fool, he is just burnishing his naughty boy image and the left loves it.
We are the foolish ones for thinking that appealing to decency and fair play means anything to the "progressives". They think abortion on demand is a right for God sake. Why are we trying to appeal to their sense of decency?
This is the Republican/Conservative blind spot. Many just don't seem to understand the Left's motto: "By any means necessary."