Well, so far Tronic has done a pretty good job in explaining how the term is not necessarily an 'oxymoron'.
I would argue that my moniker is in a sense analogous to the dissonance between 'national identity' (nationalism) and a belief that all human beings are relatively equal - I am a Pakistani nationalist, but at the same time I have Arab, Indian and (white and black) American friends, with whom I interact without paying attention to their nationality, religion or skin color.
But by virtue of being a 'Pakistani nationalist' (or Indian nationalist) one could argue that I consider Pakistan and Pakistanis 'superior' to other nations and people, but I don't.
I identify myself as a Muslim because that is the faith in which I was raised, and because it played a significant role in shaping me into the individual I am today. I define myself as an Agnostic because I don't view my faith as being superior to other faiths, and I don't view people who practice a different faith (or no faith) any differently than I do those who practice Islam. What does color my opinion about people (whether Hindu, Muslim, atheists) is how they themselves deal with differences of race and religion.
Cheers
AM