We were a pretty overtly biased and prejudiced society in my childhood (60s and 70s). In the 70's we knew that racial epithets and blatant stereotypes were inappropriate in mixed racial/ethnic company, but in casual circles amongst "like" racial or ethnic groups, comments like Reagan's were said without hesitation. In my childhood I remember clearly that many adults held very little back if they were so inclined. It didn't occur to folks that your fellow white neighbor would give a care if you used ugly racial language or made snide comments or racist jokes. That doesn't mean these people necessarily opposed civil rights -- on the contrary, I think I grew in a "progressive" area where people professed abhorrence for racism and supported equality and never would have supported discrimination as it pertained to politics or policy. These same people, however, lived in segregated communities, worked primarily with like-races, were wary when an "other" moved nearby or attended the school of their children or was befriended by their child. My parents didn't allow blatant epithets in the home and didn't use them. However, their friends and associates did. And I heard it and saw it throughout my childhood. This doesn't excuse it, but I really don't believe you can fully judge a comment like Reagan's without incorporating a discussion about the context of the difference in societal norms from then and without acknowledging that Nixon and Reagan grew up back in the depression era when racism and segregation were embedded in American life. Discrimination based on race not only happened -- it was LEGAL.
My grandparents, who would have been Reagan's contemporaries (more or less -- Reagan was a little younger), used the term "colored" very comfortably, and understood it as completely natural and normal that the colored people lived where they lived, the Jews lived where they lived, Italians lived where they lived, etc. They would express these thoughts without really thinking much about -- just the way it is and should be. They would speak about others with what I would say was mild animus -- not hatred, more like an eye roll in reference to something or someone that is different.
My opinion is that we are definitely still evolving in terms of dealing with racial and ethnic differences -- that more has been pushed into covert messaging and we are much less likely to hear blatant racist language -- there is now an expectation of social consequence for blatant racist remarks where there used to be positive reinforcement for such views not long ago. Our POTUS -- who I don't believe is an actual racist... is a narcissist who understands that messaging along racial lines gains him a degree of popularity among a populous who are ready and willing to blame "the other" for whatever is wrong with their lives or their country. He has re-tapped positive reinforcement around hateful, divisive social messages. It is both ugly to ignore the racial element of today's rhetoric or to overstate it in knee-jerk reactions to borderline comments (I am not talking about some of Trump's purposeful messaging which is hideous in it's intent -- and btw, I don't think the "heart" of his comments are about racism as much as I think the heart of it is about his need to serve his ego and gain power -- which is despicable). As far as Reagan goes, I was not a big fan, but I have a feeling that if he were alive today he would have grown past the use of the language/images he used in his conversation with Nixon. He's dead and can't defend himself so I'll give him the benefit of doubt and presume he'd regret it. Were I to condemn him for those comments I'd simultaneously be condemning generations of Americans -- probably correct to do so, but I do think we have to understand the society of his time if we are to be fair in the analysis of his comments.