Because they are offensive

> and why should someone be legally punished for it

Because that is what legal systems are for. Punishing people who do things we, as a society, find objectionable

> Who gets to decide what is and isn't offensive and to what degree?

That is a rather general question, but generally speaking, the law makers and the legal system decide things like that.

Now, mind you, personally, I support a rather radical version of freedom of expression. I think almost every kind of censorship is ultimately detrimental to society, but I am not naive enough to ask "but who gets to decide" or "but why cannot I"