Yes, it was very offensive.
Anyone who has seen a XXX movie in the past will not be weirded out by it. I think a majority of the people "reacting" to the video are overacting.
Upon closer inspection of the blurry video, all you really see are two hamburger buns sandwiching a male appendage. There was no chicken, no lettuce, and no cheese to be seen. For all intents and purposes, he could have lied about it being an actual McDonalds sandwich.
If McDonalds' sales of the sandwich decrease starting at the time the video was made public, they should sue the guy who made the video and uploaded it. This would make other people think twice before trying to copy the actions of this moron. By the way, his Twitter account has been suspended.
Yes, there is a thing called Freedom of Speech. However, with this right comes responsibility.
Of course, this is just my opinion, mind you. I've seen a lot of weird, tasteless, shocking things in my young adult years. To be honest, when the video finished, my honest reaction was, "Is that it?" I was not impressed.