I'm not disputing whether damn should or should not be offensive, I just don't think it sounds right coming out of Knuckles. Don't bring your language crusade to me, I don't care one bit about the issue.
Also, cursing in Japanese is not a 1:1 equivalent to English. Culturally the words do not carry the same weight at all. You can translate "Kuso" or "Chikusho" as "damn" or "shit," but you're not fully appreciating the nuanced differences between them. They simply aren't taboo over there.
Also translating "Bakayarou" as "bastard" among other things is extremely loosey-goosey. It literally translates to "stupid person."