So, I actually got the exact same reaction when I mentioned that I enjoyed Kim. Sadly, it was from a freaking college professor, back when I was interviewing at schools (I didn't end up going to that school, and this wasn't why, but I have to admit that it tempered my negative feelings when I was wait-listed). I said that I enjoyed Kim and she looked down her nose at me and said "oh... the white man's burden, right?" I was pretty disgusted. Yes, Kipling's attitudes are appalling, by modern standards. He doesn't even get much credit for his time, as he had contemporaries - as the story mentioned - who were also opposed to Britain's rampant colonialism. That doesn't make his prose any less beautiful and his stories any less touching. To dismiss the sum of a classic author's work as "that racist who wrote about the white man's burden" is pretty awful.
Additionally, I think this story underlined the fact that some people deluded themselves into believing that they were doing some good for the people they invaded. They saw themselves as modern Romans, whose primary interest was in enriching themselves and adding to their empire, but building infrastructure and "enlightening" the locals was a close second.
Of course, they were terribly wrong... but I have to admit that this lends some of this era's people a certain tragedy. They wanted so badly to be good, but they were blinded by their own avarice and ambition. It doesn't make them right - it makes it sad that they were wrong.
That said, I didn't like this story much. It just... didn't really gel for me. It never quite came together, coherently, for me. That said, the prose was - unsurprisingly - gorgeous and atmospheric. I have to admit, despite my earlier defense of Kipling, in theory, the casual racism did take me out of the story and limit my engagement with the characters, though I view that as a personal preference rather than a categorical flaw.