"Unless I am missing something, there is nothing inherently offensive about the cheer."
Using the cheer is causing pain to someone who's still on the team It's grossly insensitive to someone who's got a good reason not to want to hear it, and it's divisive. Since it's a single cheer routine in what I assume is a large repertoire, I can't imagine why anyone would want to continue hurting a squadmate with it. The fact that the boys who are teaching it to the squad consider what happened to be "no big deal" just adds to the hurt, and it's just so unnecessary.
"It has nothing to do with the coach."
I agree with this point, but as I said above, my reason for banning the cheer isn't that this coach made it up, it's that it's causing a current squad member unneeded grief.