The problem with the term "self-defense" is that it excludes defending others. Taken literally, the implication is that it's okay to use violence in defense of yourself but not okay to use violence in defense of other innocents.
Of course, most people don't believe that, but I don't think it's accurate to say that the term isn't causing any harm because no one outright believes it. I've had an experience where people acted this way, after all. I don't think many people are bigoted enough to say the kid wouldn't have been justified to defend himself, but somehow other people defending him is seen as interfering with someone else's parenting or some crap.
Unfortunately there aren't any easy alternatives to this phrase. Sometimes I use phrases like "defending the innocent" but that's so much longer and doesn't make the same instinctive connection, because the phrase isn't in standard use. So even I end up talking about "self-defense" for convenience often.