I went to a K-8 school that had a group of students called "non-graded." We often went on field trips together, and got to know some of them pretty well.
That was "unusual" in the sense that most schools didn't have that kind of group of students. But who hasn't had contact with people with Downs Syndrome or other mental retardation?
I wish "retarded" was still acceptable to refer to the mentally handicapped. Everyone knows what it means. But people started using it as a pejorative against others whom they disagree with. Meaning, they used a word for people who are morally innocent of their mental incapacity, and then used it on people they think are morally guilty of willful ignorance or bad ideology. The word was abused. That's why it's becoming unacceptable. And it seems to me that those who rail against "political correctness" the most are the ones who abuse language and other people the most.
Not that I'm for "political correctness." There should be no law against offensive speech, and it's poor policy for even private schools to ban certain words.
But that doesn't mean there aren't consequences. Careers and reputations have been destroyed by using the N word. It might happen soon with "retarded."
And it's a shame, because there's nothing inherently offensive with "retarded,: nor with "nigger" if understood only as a local dialect version of "Negro."
But when words are abused to abuse people, it's not surprising when civilized people choose not to use those words anymore, and look askance at those who do.