So you'd happily use the N' word, "fag," "gay," and similar since you can re-define them in your head to be just general insults, rather than associating negativity with the groups for which these words were originally used?
Sorry but we both know the reason you're using that word is because you want to paint them as being mentally handicapped which you perceive as "bad." You can pretend that isn't what you're doing but even if that is true that is how others perceive it, because when they hear the word "retard" they think mentally handicapped and you're using it as a derogative.
Retard does not have the same "inappropriate" connotations in the UK as in the US (certainly it's nothing like using nigger or fag(got) in conversation as a pejorative).
But yes, I do think being mentally handicapped is "bad". Are you arguing that it's "good"?
But regardless of your opinion, using it as an insult is uncalled for. Since essentially you're lumping people who already have problems in with whatever it is you're trying to insult.
Retards, in my vocabulary, means someone who is not mentally handicapped but is a cretin. I could have used the word "cretin", in fact.