You're not taking the passage out of context. I'm not sure what context would be necessary for this to reflect well on the authors' intentions toward indigenous people. But maybe it's enough to say that the Declaration of Independence's brief statement on indigenous warfare appears in the middle -- not at the beginning -- of an already longstanding history of conflict. This passage doesn't represent the naivete of a new nation or a lack of cultural sensitivity or knowledge, but the position of one side in the midst of an already deeply entrenched series of wars. An enormous percentage of the US federal government's earliest budgets were taken up with the Indian Wars, and in fact George Washington was personally involved in those wars himself.

I'm including a few paragraphs from Robert Williams' Like a Loaded Weapon below. Williams is a legal historian:

An overtly racist, hostile, and violent language of Indian savagery can be found in the first official U.S. legal document promulgated by the Founding Fathers, the Declaration of Independence. Among other misdeeds, that founding text of American liberty charged the king of Great Britain with having “excited domestic insurrections amongst us” and endeavoring “to bring on the inhabitants of our frontiers the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.”

The racist, organizing iconography of the Indian as irreconcilable and inassimilable savage other continued after the Revolution as one of the core organizing beliefs inspiring the Founders’ vision of America’s growth and potentiality as a new form of expansionary white racial dictatorship in the world. We see this hostile racial belief system reflected throughout the first pronouncements on Indian policy generated by the Founding Fathers after the Revolutionary War.

On September 7, 1783, just four days after the signing of the definitive peace treaty in Paris ending the war with Great Britain, George Washington, commander-in-chief, at the specific request of the Continental Congress, delivered what turned out to be the basic blueprint for the Founding Fathers’ first Indian policy for the United States. That blueprint is contained in Washington’s carefully considered set of recommendations “relative to Indian Affairs” in the “Western Country.”

Notably, Washington’s entire plan for dealing with the tribes of the Western Country was organized around the basic idea that the Indians on the frontier were bestial, war-loving savages and should be dealt with accordingly as a matter of U.S. policy. They should be kept apart from the civilized population of the United States, behind a boundary line drawn to facilitate the gradual and planned colonial expansion on the country’s western frontier...

Some good points have been made, especially by VermeersHat. I would just like to add one point for background on the reason for those comments on Native Americans and their warfare. Several scholars asserted that by and large, both Natives and immigrant Europeans completely misunderstood each other's cultures, particularly their modes of warfare. Native and European warfare affected each other, producing unique strategic and tactical considerations on the continent. Combined with the influences of converging Empires of France and Great Britain, colonists and Natives alike struggled to adapt and survive between clashing imperial powers and cultural understandings. By the late 1600s, by and large, many natives practiced what was called a "mourning war" by which raids were conducted to kidnap individuals to replace a lost member of their community. These could target men, women, or children and usually resulted in a measure of destruction. Correspondingly, Europeans seemed to embrace an all out destructive warfare, such as we see in the Pequot War, that decimated entire communities. This decimation seemed to Europeans warranted, as they could not fathom the raids and "skulking" warfare of indigenous populations.

There is a generational aspect here as well. By the time of these "clash of cultures," the sons and grandsons of European settlers suffered from similar economic, political, religious, and social breakdowns that had largely motivated them to emigrate from England in the first place. These pressures led to more racial resentments, as desire for land and economic power grew among these settlers. Combined with Native resentment over encroaching Europeans and their dismissal of old jurisdictional and legal agreements, protracted war seemed likely.

Across the continent, clashing cultures resulted in destructive European vs. Native Wars, such as King Phillip's War, the Yammasee War, and others, largely destroying a measure of cohabitation that had marked early European and native communities. As imperial wars grew in frequency, seemingly breaking out every decade, differing native groups were pushed and pulled into other power's orbit and participated in such conflicts. Their roles, to disrupt interior communities and put pressure on colonial's ability to aid their imperial masters, left a bitter memory in the minds of colonists. Correspondingly, European's harsh warfare also left bitter memories amongst native peoples.

By the time of the American Revolution then, both sides had experienced nearly a century of unremitting warfare and accompanying ideas of cultural and racial superiority that put off non-immigrant Europeans. Many remarked that American colonists held a special hatred for natives, largely bound up in this history. Added to this background is the fact that differing native groups correctly observed that victorious American colonies would end geographical restrictions on colonial encroachment, as well as economic agreements, resulting in many tribes joined the British cause. Other tribes, who saw opportunities to exact revenge or gain a better foothold over old native enemies, joined the American side. The result was a chaotic and to colonists, confusing warfare. Racial conceptions that had hardened during the colonial period did not allow them to see differing motivations, cultural values, and etc, resulting in the sentiments we see in the Declaration of Independence.

Thus, the Declaration served to act as a propaganda piece, that leveraged old racial concepts and bitter memories, and combined with the chaotic nature of the American Revolution to produce growing support against the British Empire. We should not minimize the colonial resentment at old imperial policies of settlement restriction and now of enlisting native support for a war against his own people. All of these factors meshed together in this document and would inform American opinion for hundreds of years.

Sources: Richter, Daniel K. "War and culture: the Iroquois experience." The William and Mary Quarterly: A Magazine of Early American History and (1983): 528-559; Anderson, Virginia DeJohn. "King Philip's Herds: Indians, Colonists, and the Problem of Livestock in Early New England." The William and Mary Quarterly (1994): 601-624;Calloway, Colin G. The American Revolution in Indian Country: Crisis and Diversity in Native American Communities. Cambridge University Press, 1995; Lepore, Jill. The name of war: King Philip's War and the origins of American identity. Random House LLC, 2009.

I would also point out that the Declaration was used as propaganda to an extent in an attempt to gain support for the revolution. If all you do is read the declaration without any background, its easy to think, for example, that the colonists had outrageously high taxes levied against them when in comparison to the taxes British mainlanders were paying the colonial taxes were quite low. So although the they may have certainly had prejudices against the natives, that type of language could have been used partially to elicit support.

Keep in mind the constantly shifting alliances that had arisen during the French and Indian War only a decade before, with the French using Indian allies against the English colonials, and various Indian nations having their own reasons for hoping the war would help them keep new (mostly English) settlers out of their lands. The makeshift nature of both diplomacy and war in this conflict naturally led to acts that might later be considered war crimes, and to suspicion about various alliances.