It would be clearly offensive to me if done today, but pretty much "par for the course" in the context of the 1950s. They did what they had to do to get the album sold in the widest geographic range possible. So, it's about as expected as much of the other "white-washing" of ethnic items in the 1950s and before. Would a real-life Ricky Ricardo (from "I Love Lucy") really have a high-level Cuban band in New York City where all the members were fair-skinned? No, but a U.S. television network wouldn't have dared to be ethnically "accurate" in those days and expect the shows to air in Southern states. It's very unfortunate that things operated that way in those days, but I understand how it happened. That's why extra praise should be given to people who did have the guts to go contrary to the mainstream. Along those lines, Cal Tjader probably deserves some personal credit for employing musicians regardless of their heritage, even if the record company wouldn't market the band accurately.
I'm less offended by this aspect of the artwork, since the record company was probably looking to have something on the cover that quickly conveyed "Latin" to a purchaser in the United States in the 1950s. With very little mainstream knowledge about the variations of Latin culture, a Mexican bullfight and people in sombreros did (and still would today) clearly convey the general message of "Latin" even if it doesn't convey the specific message of where the music actually came from. As an analogy, I live in Texas, and I've stopped caring about the number of times a Texan character in a movie/television show/advertisement is wearing a cowboy hat -- despite the tiny percentage of Texans who wear cowboy hats on a regular basis in the 21st century (especially in the large urban areas). Indeed, even major Texas cities will play up the cowboy image in our own tourism ads, because they know that's the image that comes to mind when most people think of "Texas." :cowboy:
If the title of the album had included "Cuban Concert" and people were in sombreros, then I would have more of a problem with it. But, the setting of a bullfighting arena isn't as offensive when the general term "Latin" is used. It's just not possible to capture every aspect of Latin/Hispanic culture within a single piece of artwork, so the choice was made to pick one clearly recognizable element. Plus, it's obvious that a little bit of humor was intended, with the depiction of the bull sitting and listening to the music himself.