I don't refer to Catholics with terms that I know are seen as pejorative. However, capitalization or not of the word "catholic" serves a purpose when used as an adjective. Lower case "c" catholic would refer to the universal church without denominational distinctions, while upper case "c" Catholic refers primarily to the Roman Catholic Church, a particular part of the church universal. The general term "catholic" was in general use meaning universal before the Church of Rome began using the term to refer to herself.
A good example of that would be in the Apostles' Creed which refers to the "holy, catholic church" - lower case c. It is not a statement of belief in the Roman Catholic Church which is why many Protestants have no problem affirming it.
In this particular case (Post 464), catholic was referring to those who’ve grown up Catholic, just as methodist, baptist, and lutheran were referring to those who grew up Methodist, Baptist, and Lutheran, respectively.