There are dumb ideas, and it can be useful to point out their weaknesses in a constructive manner. However, using the word retarded to describe something in a negative way is both childish and derogatory.

Here's an eloquent description of why what you said is inappropriate. When saying retarded, “What we mean is that he is as stupid as someone who is mentally handicapped, and we mean that in the most derogatory sense. The implication is that the only characteristic of mentally handicapped individuals is their stupidity."