if the witness had said "drunk Asian"

Yes, I wonder, too. I would consider the main objection to "Oriental" to be that it is too general. To say someone is an "Oriental" conveys about the same amount of information as saying he or she is "North American"; at least, I think so.
I think some of these things are fashion, too - "Black" used to be OK, so did "Negro"; in fact, I recall conversations with, um, black students who said that's what they preferred. I think it has a lot to do also with who's saying it and how.
A Caucasian friend of mine who adopted a mediaeval Japanese persona in our recreationist group always referred to himself as an "Ornamental".