Yes, Slash should have told the story because it's entertaining for the audience. David Bowie was a public figure and he should know that what he decides to do would become public. If Slash was embarrassed by his mother's behavior, he has every right to talk about that feeling. Maybe in doing so someone else can learn how embarrassment feels and how not to hurt another person's feelings.
Slash told the now infamous story about David Bowie and his mother because he has a right to free speech. Nobody's reputation was harmed in the story, it's a funny anecdote! Slash told this story to a friend on the phone a long time ago and he is embarrased about it now more than anything.
I do not think it was Slash's place to open up about this story. Despite sharing the story last month about how he once walked in on his mom naked in bed with David Bowie, Slash now says he is "embarrassed" by the tale and is trying to downplay any dirty deeds between the pair.
Slash should have kept that story to himself out of respect to his mother and to David Bowie. Firstly, one does not go to media with lurid stories about one's mom. Really bad taste. Second, David Bowie just passed away, can we not focus on his contribution to music, art, fashion, and generally good style? Finally, by sharing this type of story at this time, Slash did a fine job as presenting himself as cheap wares.