Personally I thought it was just shortening a long football name, from 'Manchester United', which in it self, is quite a mouthful, to 'Man U', either way, all this happened along time before most people on this forum were born, and I guess most people wouldn't have a clue about the origins of Man U.
Personally, I think it's a bit odd to get annoyed at your own fans using the term, considering most people just see it as an abbreviation of the club name, rather than an offencive term, that is only really considered 'offencive' to the older generation of United fans.