It's been turned into a slur by racists, just as P*** could be a legitimate contraction of Pakistan(i) in another world, the fact that small minded people used it to abuse people gave it negative connotations.
Yup, for example Jap, in British English is supposed to just be short for Japanese. In American English though... it’s offensive, like that word... since they have more of a history of overt Japanese racism stemming from WW2 and a Japanese-American population. I suspect thought, like the importation of US cultural attitudes towards use of the n word that Jap could be seen as taboo here too.