The reason that this has become an issue is because the Sioux tribes in North Dakota do not want the school to be named the Sioux. In Florida, for instance, the Seminole tribe has officially taken the position that they're ok with the name - and I'm sure if you polled most Irish people, they wouldn't vote to change the name at Notre Dame.
You have to understand the historical context here. The racism in North Dakota towards Native peoples is pretty awful. A co-worker of mine from ND used to refer frequently to the "drunk scum-bag Indians" where he grew up -- Not happy stuff.
The University of North Dakota is a public institution -- the Government has forked Native Americans over for decades, so the least they can do is change the name of a stupid mascot, if the people find it offensive.
In this case they do... open and shut case.
Whoa, the Dude got all political there for a second - how very unDude of me...
And remember, that's just like, my opinion, man.
I am the Walrus