OK, first I read the article about Michael Richards (aka Kramer) being racist on the show, http://news.independent.co.uk/world/americas/article2004242.ece
They mentioned the video of hims speaking the racist words was made. I searched for and watched this one, http://video.google.com.au/videoplay?docid=-8044789871599060390&q=michael+richards
I must confess I saw nothing that would indicate that the actor "broke down" on the stage. He was just a defiant trickster. He was professionally expressing himself. This raised his profile. This gave him more visibility (the Hollywood people raise their profile by any means, even by involvement into scandal, as everybody knows). This stand-up just did not end as he was expected.
Americans do not see it, but it is seen from outside: the Americans are brainwashed into certain life values. One of them is an exagerrated intolerance to racism. It is ridiculous. But it is also the sign that the West (the USA) is deeply rotten inside. The disease went too far.