Kilroy-Silk is an idiot, no doubt about that. You simply have to have even a basic grasp of history to know that Arabs have contributed far more to "civilisation" than the nothing he claims they did. For example, there is civilisation itself. Not to mention important contributions to science, astronomy, mathematics, medicine, architecture, and other branches of science for close to a millennium. Then there are the contributions to prose, poetry, and philosophy. Or visit Andalucia and see some of the most beautiful architecture in Europe (not to mention the irrigation system).
Kilroy-Silk is an idiot, no doubt about that. The very fact he refused to stand by his article and apologised for it shows he knew it was nonsense. If he meant to say that Arab states are despotic, treat women abominably and so on, then why did he not say so to begin with? These are facts and have nothing to do with "Arabs" as a people. But he did not mean to say that, as is obvious from his racist article.
However, the calls to fire him are wrong. You do not fight bigotry by sweeping it under the carpet. Far better to expose it to the withering light of informed debate and discussion. The best solution to Kilroy-Silk would be for him to defend his nonsense in front of an audience full of experts on Arab culture, history and life. Faced with that, he may prefer to resign than be publicly humiliated.
Similarly, those papers who accuse Kilroy-Silk of racism should simply show why he is so obviously full of shit. Ridicule is far more effect than authoritarian measures, particularly as the latter will always backfire on those who propose it. Giving employers the right to fire someone who makes political remarks is hardly clever. After all, what would stop them using that power against, say, revolutionary workers? The history of giving the police extra powers to combat the threat of fascism has always seen those laws used against anti-fascists.
Does that mean libertarians say we must tolerate racism? No, far from it. We say we must combat it with direct action. People who work with racists should expose their ideas to ridicule. They should shun them wherever possible, preferably collectively. Workers in Kilroy-Silk's show could refuse to work with him, for example. Viewers must turn off their tellies. His audiences must expose his feeble excuses. Perhaps they could pelt him with Turkish Delight well past its sell by date.
Ultimately, the only way to effectively combat racism is to combat ignorance and that can only be done from the bottom-up. While this may take longer than state action, it will be far more effective as it will get to the root of the problem. State action will just sweep it under the carpet to fester and grow. It will create the appearance that idiots like Kilroy-Silk are a persecuted minority, so allowing real persecuted minorities (i.e. those subject to racism) to be ignored.
It will also give the state and bosses even more power to determine what can and cannot be said. And only someone who is an even greater idiot than Kilroy-Silk would want that.
Finally, it does seem the high of hypocrisy for the British state to say that it is bad to insult Arabs when it is more than happy to bomb and invade their countries. Obviously killing Arabs is much more acceptable than ignorantly slandering them.