I understand the objection, but a word is defined by its usage, not its origin. We're vastly outnumbered in a general audience, and this battle was won a couple decades ago. The NY Times is not going to print "crackers" because the word would not be understood, and a word already in use would work fine. (Even the small niche that objects to its use here has no problem knowing what was meant.) Not to mention that "crackers" already has a meaning when applied to a group of people in the US.
Let's agree that this semantic debate (previously on HN [1]) is pretty much unresolvable. A word can have multiple meanings, and the common media use is more ancient than ours. [2]
You should have just ended after suggesting that hte debate is pretty much unresolvable. :-D
And just to be up front about the whole thing -- I prefer the non-malicious use of the term. Hollywood has a pernicious tendency to stereotype anything and everything, and the fact that that culture is mostly responsible for promoting the malicious use of the term means that in my book they shouldn't get to determine its meaning.
Around 1980, when the news media took notice of hackers, they fixated on one narrow aspect of real hacking: the security breaking which some hackers occasionally did. They ignored all the rest of hacking, and took the term to mean breaking security, no more and no less. The media have since spread that definition, disregarding our attempts to correct them. As a result, most people have a mistaken idea of what we hackers actually do and what we think.
"Cracker" is a very specific term that relates to those who hack static files, by breaking encryption, etc. A cracker might discover a back-door, but if they exploit it to access a running server, that's not cracking, that's hacking.
Hacker is a general term which can apply to white-hat hackers and black-hat hackers alike. It means anyone that breaks things apart to see how they work, then puts them back together in a way that does something they weren't designed to do. That could mean getting Mario to run on a Ti-83+, or getting root on someone else's server.
Unfortunately, while we have the words cracker and phreaker for particular subsets of hacking, the subset that tends to get itself a lot of negative publicity by hacking into computers doesn't have any special name associated with it.
As a hacker (in the HN sense), I don't have a problem with this. The meaning is always pretty clear from the context. All it means is if you say "I'm a hacker" to someone, you better be prepared to explain what you mean. But if you say that, you're setting yourself up for a pretty geeky conversation anyway, which many won't appreciate.
Hackers that hack into computers aren't necessarily all black hat either. It's perhaps less common nowadays, but a lot of hackers just do it to see if they can, or to see what they can find on networks, simply out of curiosity. The latter is the defining characteristic of all hackers.