FurFag was originally used in an offensive way to, obviously, refer to furries as homosexuals. As homosexuality is supposed to be insulting in some internet communities calling all furries homosexuals would be considered insulting. The problem is, a lot of furs actually DO tend to be homosexuals, so now that times have changed and homosexual hate is seen as a tad more taboo around the internet, a lot of gay furries call themselves fur fag to be funny and ironic. Calling each other furfag in jest is, I consider, more a "HATERS GONNA HATE" kind of approach, essentially showing that they don't care about haters and what not.
I'm personally indifferent to it