Like most of TMZ's headlines about Kanye West, what he actually did isn't nearly as bad as the gossip site made it out to be. In this case it's not really bad at all, as you can see in the footage above. At a concert last night in Australia West stopped in the middle of "Good Life" and said, "I can't do this song if there's anybody in here sitting down." Obviously he wanted everyone in full turn-up mode. "Unless you're handicapped...," he continued. "I need to to pull out your handicapped parking slip right now."
Someone with a flashlight, presumably security, then scoped out a person sitting and confirmed they were in a wheelchair, and a person with a prosthetic leg held it up for 'Ye to see. Satisfied with seeing every one capable of standing doing so, Kanye continued with the song.
This might sound obnoxious, but Kanye was clearly trying to maximize the audience's involvement. Considering his dedication to putting on the best live show possible, this shouldn't be a surprise to anyone. Someone in the crowd even told TMZ Kanye didn't mean to offend and that the whole thing is being blown out of proportion, but that was buried at the bottom.