>Is there a word ...

Irony, I was going to say sympathetic irony but I realised from the context that it could have been unsympathetic.

I don't know if there is a better word. For example how would you describe the current usage of the word "sad"?

The flippant answer is "sad".

Footnote: I've just done what they always say to do in exams - "Read the Question first!" I missed the intervention of Mrs Malaprop.

I thought you were refering to the fact that people sometimes turn a word which could be construed as an insult, back into a word which is used by the group to describe themselves (this is the case with the un-malaproped version of the word you originally posted).... if anyone knows what I'm rambling on about ...