Should I have reported this?

[Themarvin]

2 days ago I queued for The Dusk Vigil (with my alt character, as a DPS). After completing the duty, just after I posted a "thank you" in the party chat and did a player commendation, half a second before I clicked "Exit", one of them obviously felt the need of typing this in the party chat: "UR CHARACTER IS HIDEOUS" (yes, in caps). I don't know if he meant me (my alt is a female Roegadyn) or if he meant someone else in the party. It doesn't even matter if I was the target of this. No one should be the target of insults, be it about race or outfit of their character.

I'm not trying to be "snow-flaky", but is this what FFXIV has become? I didn't see this kind of rudeness before in this game. Where did this behaviour come from?

After I had clicked Exit and realized how rude that player's text in the party chat was, I wasn't sure if I should report him. Should I have? Should I report next time such a thing happens?

Don't worry about that, and the person who did that is not worth your time or for that sake anyone elses, if anything you should feel sorry for the moron for being able to stoop this low.