Why it's funny is obvious enough: I'm an old gabacho, so not many people would say I "look illegal." From what I see and hear, I'd guess that if you asked most people what it means to "look illegal," they'd come up with a stereotyped Mexican: brown-skinned, black hair, brown eyes, maybe a mustache and a gold tooth, speaking little English and that with an accent. But that would describe many legal immigrants. (I've accompanied a few friends to immigration court over the past few years, and noticed that quite a few people who've run afoul of our immigration laws are not only not from Latin America, they could pass for white Americans on the street. So, though not many people would agree that I "look illegal," there are probably undocumented immigrants who look like me, and many (most?) people who fit the stereotype I just sketched are not only legal, but citizens.
It's likely, I suppose, given the proximity of Mexico and the US, that the majority of undocumented immigrants in America today come from Latin America, and a good many of them "look Mexican" according to various stereotypes. But as I've pointed out before, the real problem is that many American racists don't consider any immigrants to be legal. They assume that anyone with brown skin, black hair, brown eyes, a Mayan nose, and so on is undocumented, which is not the case. (Often the targets of their hysteria turn out to be native-born US citizens.) I doubt that anyone has tried to find out just how many immigrants from Latin America have that indio look, but remember how the policy analyst Jason Richwine, possessor of a Ph.D. from Harvard, simply assumed that "Hispanics" are a distinct race. In the US, Hispanics -- that is, Spanish-speakers -- include not only "Indian peasants from Yucatan and doctors from Mexico City (and Madrid)," as Jon Wiener put it, but black people from the Dominican Republican and elsewhere. In Latin America, there are native Spanish and Portuguese speakers of East and South Asian descent. The Nation published Wiener's article asking how Harvard could have granted a doctorate based on such "a discredited approach to race and IQ," but I think that question answers itself. Scientific racism is alive and well, and survives all attempts to discredit it.
So that's why I think it's not only funny and cool for me to wear this t-shirt, it's also useful. It challenges stereotypes of what illegal immigrants look like, stereotypes which are most malign when held by white American racists, but aren't limited to them -- as witness the young woman who buttonholed me last night. Funny, cool, and useful: works for me.