[pluma]

So is "idiot" as bad as "retard" then? What about "imbecile"? What about "moron"? And what about "cretin"?

If "medical description of a person with mental disabilities" was a sufficient criterion, all of these would be equally inappropriate (even in an informal / vulgar context). But even tumblr will find it hard to get outraged about the use of the word "cretin" (outside the use as a direct slur against someone with mental disabilities).

Context is important and context is not just about the original meaning and use of a word but also time. We generally find archaic insults humorous -- this isn't because the phrases were harmless at the time they were in widespread use but because they haven't been in widespread use (in their original meaning) for a significant amount of time.

The problem with "retard" isn't merely its historical usage. The problem is that that historical usage is fairly recent.