It would still be ironic (for want of a better descriptor, satirical would probably be better), its status as irony is not dependent upon other people understanding it as such. It was a poor choice only insomuch as plenty of people mistake it for bigotry on the part of Knopfler, when it is quite the opposite. But that sort of blowback is something artists have to deal with all the time, unfortunately the world is full of stupid people who care more about the words themselves than why and how they are used, and prefer to react hysterically rather than stop and consider what they are reacting to. As an artist, Knopfler is more than entitled not to give a shit about those people.
Roger Taylor of Queen had a similar problem with media outlets refusing to play or stock his anti-fascist song "Nazis", because he called it, wait for it, "Nazis". The horror.
