I have heard people use that and never really thought about it. Yeah, I guess if you stop and look it is an insult, but at the same time one of those that can be innocent. Like when my daughter calls me a nerd.
Actually, I think most that have used it are referring to the fact that a great deal of Monroe is from the south, one city in particular I think. More like saying that Monroe is a little piece of the south, but not in a bad way.