I am going to guess that it's someone doing an impression of the Shrek voice and not anything that Mike Meyers or Chris Farley recorded. The franchise is new enough that that both actors would have known saying it is not a good idea, especially not saying it as the character. Mike Meyers used a Scottish accent for Shrek, but that doesn't rule out Shrek being black.

From what I've read, that word originally had a more common and acceptable meaning, kind of in a generic sense like you'd say someone is a "New Yorker" or Englishman. In some cases, it could even be a point of pride to be known by that. But as time went on, using the word changed so that it demeaned and hurt others, to the point where we don't even say that word if we can avoid it. We refer to it as "the N word" instead of saying that word. The ones that do say it often do so as part of bigotry and hatred.