I don't think his position is reasonable. JRPG does describe an RPG subgenre, just like CRPG or ARPG do. They have specific formats, structures and tropes that they all adhere to religiously.
He also omits the fact that not all RPGs coming out of Japan are called that. Once they stray enough from the trope of the genres, they are no longer included in it. If it looks like a duck, quacks like a duck...
Finally, acting as if people have a racist or discriminatory slight against those games because of the term... I don't think I've ever seen people do that, other than disliking the general style and anime aesthetic which is entirely fair?