1) Some people are legitimately hurt by the use of the word retarded in a derogatory manner (eg. http://www.r-word.org/r-word-effects-of-the-word.aspx).
2) You are choosing to use it and offending them.
Argue all you want, but the fact remains, you have no doubt offended someone. Is using whatever word _you_ want (ie. being a bit selfish) worth hurting someone else? Would it be that much trouble if you used another word, was still able to make your point, and not hurt someone's feelings?
It's one thing to accidentally stumble upon something that might offend someone, but it's quite another when you ignore the fact that your actions hurt someone and continue to engage in that activity willingly.
I don't mean to single you out as others below have used similar language, but it's something to think about.