Wow this is a really complicated issue. They use native imagery respectfully. The team didn't pick its name to be disparaging, yet most dictionaries currently define it so. They certainly chose the name to invoke Indian bravery and toughness, a positive stereotype.
Many other sports teams used to have the same name. Most when changing it have lost the American Indian reference, notable exception: the Utah Utes named after a tribe.
Is it appropriate homage to name a team after an ethnic group, even if it is not inherently disparaging (i.e. 'savages')? Is it only acceptable once they're extinct such as the spartans and vikings? Yet other teams exist: bethany swedes, New Zealand Māori, canadiens, americans, canucks. Clearly there are no hard and fast rules.
It's the referenced minority's choice, not ours. If a majority of them find something disparaging, then we should abide by their wishes - not make their choices for them.
I would hate to lose a positive American Indian reference, but it can certainly be improved. I wonder how our Indians would respond to a chance to name this sports team. That would definitely honor them.