A month late, I've stumbled across a New York Times article about how different democracies deal with limitations on free speech. Apparently, only the United States really fully means it, protecting people's right to lie, offend, and be systematically nasty; Canada, at the other end of the spectrum, doesn't even allow merely insulting talk; the Canadians apparently feel one of the responsibilites of the State is to preserve harmony. Germany, Israel and others have specific limitations based on their particular historical pasts (you can't say Nazi things in Germany, you can't sell Nazi stuff in Israel).
Personally I lean in the direction of the American method. Speech that directly incites to violence is forbidden, but nothing else. Any other system will require the authorities to decide what's "nice" and what's "not nice"; that must by definition be a subjective evaluation, very much determined by the identity of the observer.
Or, to be more specific to my world: hatred of the Jews is embedded so deeply in much of Western culture, that many shades of antisemitism are totally unrecognizable by the antisemites, who sincerely believe they're merely saying things as they are. These sentiments are profoundly potent, and yet they're never detected by "guardians of free speech". Better to let the market of ideas combat the perniciousness than have some thought police do it; the thought police, after all, would soon be understood by the antisemites simply to be tools of the Jews.