Barack Obama treats his supporters as reasonably intelligent people. He expects, naturally enough, that when he characterises Bush’s policies as being like “a pig” – not beautiful – and McCain’s policies as being like a pig with lipstick on – supposedly changed for the better, but actually still not beautiful – at a rally at which much of the audience will be supporters of his, they will understand his meaning. It is, in this case, not a terribly complex meaning to understand.
John McCain, on the other hand, either is stupid or else treats his supporters as stupid (neither of which make him a laudable candidate for U.S. President). If McCain did believe Obama was characterising Sarah Palin as a pig, then he (McCain) is stupid and incomprehending. Alternatively, and more probably, if McCain understood that Obama was not characterising Palin as a pig and was not making a sexist remark, but chose to characterise Obama as doing so anyway, then he (McCain) was calculating that his supporters would be stupid enough to believe an obvious and childish lie, and was also willing to publicly tell that lie.
To paraphrase Aneurin Bevan (and Martin Rowson, whose work alerted me to Bevan’s phrase): if John McCain didn’t understand what Obama was saying, then McCain is too stupid to be a good President; if he did, then he’s too evil to be a good President.