"Retarded", just like "spastic" and "crippled" (and I'm sure you can think of loads more), started off as a medical term used by the care/medical types who provided care for those people. Over time the word came into common usage as an insult. It's hard but important to remember that we can't rewrite every piece of legislation, medical text, historical account, etc, simply on the basis that some playground-mentality jerks have twisted the comonly-used words around. People do still try to do it - like when The Spastic Society rebranded as Scope - but I'm not convinced as to how much "being PC" helps. Often the fuss about what is the correct term to use of (random example) a person with depression, draws a bit too much attention away from how to actually make life better for that person.