Gene Demby explores the question:

Neal Lester, who teaches a course at Arizona State University about the word’s history, says it spread into wider usage during Reconstruction through the early 20th century, when it dotted children’s rhymes and even the names of consumer products. But, he says, “there are ways that the radioactive part was always there.” … Lester makes a common argument: If the word can still be used as a vile epithet, it can’t be considered neutral or harmless in any context.

The black-people-use-it-all-the-time-so-why-can’t-I argument is a popular rejoinder; Dr. Laura Schlessinger made the argument after she was chided for using it on her radio show. But these arguments rest on the idea that the word mutated only recently into its “friend/brother” iteration. But [linguist John] McWhorter says that the reappropriative usage — that is, among blacks to other blacks as a term of endearment — is hardly new, and predates hip-hop by quite a bit. “We’re romanticizing the way the N-word was used in the past,” he says. “You can see 100 years ago that people were using the N-word in the same affectionate way. You can see it in Zora Neale Hurston’s [writing] and not just once.”

In other words, the racially pejorative usage of nigger and the in-group usage of nigger have long existed side by side; the word and our racial dynamics are messy enough for it to simultaneously represent different, disparate ideas.

An answer to Demby’s question:

“Like other strong slurs, the N-word inherits its toxicity from the larger culture,” [professor Geoffrey] Nunberg says. “So long as there are virulent forms of racism around, they’ll continue to infect the word. It will be weakened only when those attitudes are attenuated, in the same way that social acceptance of Irish-Americans has softened the contempt that was implicit in ‘mick’ in the 19th century.”

He pauses a second. “That could take a while,” Nunberg says.