@Srini *****
Yeah, so am I, and a lot of my family members still mean NA when they say "Indian." Since I've actually been to India twice (specifically the Northeast) I tried in vain to tell them not to call NAs Indians.
However, even Latin Americans still use the term indio to refer to a lot of their indigenous people, because that was the term that was used during colonization. Kind of like how all Germanic-speaking people were called "Dutch" until the late 19th century in the U.S.
Again, I agree that it's offensive to say "dots" (especially because there are many Indians who are not Hindu and don't have bindi or anything), but MANY Americans who don't live in a liberal state like California or New York are not exactly up-to-date on politically-correct terms.