I think he was playing to the crowd by singling out the one person who didn't belong there, not because he was a spy from a rival campaign -- shadowing is standard campaign practice these days -- but because he looked "foreign" (my word, not his). I think he came up with "Macaca" as a kind of generic name for a foreigner who appeared to be from the Indian subcontinent, or someplace over there where people have dark skin and straight black hair. Why else would he add the "welcome to America" bit if not to emphasize Sidarth's apparent foreignness?
There is a story of two Virginias here: one Virginia (bearing North, much more diverse and heavily immigrant) where Allen wouldn't dare and the other (bearing harder South and redneck White) where Allen feels most comfortable. As repulsive as the comment is, it might actually work to Allen's favor among those in the latter Virginia who are White and feeling Disposessed by a surging immigration boom in the state. It will all depend on what his challenger, James Webb (D-VA), does with it. Webb may realize the anti-immigration dynamics at work here and, rather than risk alienating White votes he'll need, prefers not to say too much about it.
What's more interesting is the deafening silence of the Black political mainstream and electorate in Virginia, known for enduring years of Confederate-born racism. An interesting question worth asking is whether that silence is based on behind-the-scenes politics or a quiet undercurrent of African American resentment over other pluralistic groups taking a piece of the economic and political pie.