I wasn't on Aces High Tuesday night either, but it sounds like people were being bigots on rook country channel. These are probably people that Talon previously respected. Therefore I can certainly understand him switching to another country and/or leaving the game. If I were on I would have reported everyone doing it and if they were in my squad, I'd have additionally taken it to the squad leadership with the expectation that they be booted. If they weren't booted (after a fair trial, as that's how its done in the LCA) I'd leave my squad.
I've been online in various MMOs enough to know that in a group of over 10 people or so, there's always going to be people who hide behind their anonymity and push their free-speech rights as far as they go. The thing is, free speech rights don't go as far within the game of Aces High as they can go elsewhere in the USA and other free countries... within Aces High there are additional rules you agree to when you join the game. But these people will say it anyways and wait for the punishment, which will only come if they're reported.
These people will always exist and say their offensive statements, the best thing to do is report and move on, and if they remain in the game because HiTech is lax in banning them, don't associate with them. But even if they're banned, 2 more will take their place. Because of that I don't see the logic in quitting the game... there are no alternative games where these people don't exist. The good guys quitting seems like a harsh and unfair penalty for the bad guy's poor behavior, and its self inflicted.
I guess the TL;DR version is Talon, don't quit!