My understanding from high school psychology class, is that moron and idiot were classifications that indicated something of a need for institutionalization. Having grown up with a sister with Downs Syndrome, and - for a few years in her teens - a cousin with Downs, I can attest that these people enriched my life and never once offered any indication of requiring the mere existence of an institution. Yet institutions did exist where people just like my sister and cousin were left to become "idiots" and "morons", through treatment akin to dogs in puppy mills. It was too easy to equate "retarded" with the same kind of incapacitation that society regarded with the other terms in use. And I think it demeaned them all the more considering they can, and do, become productive, independent individuals with a lot to contribute. So the crime goes beyond medical mistreatment. It becomes something of a crime against humanity, and it was society at large, accepting that there was no place for people of lower intelligence, and tossing around words like retard, that made it possible for so long.
At this point I do feel that it is just a word, because the world has come a long way. But it's use is entirely unnecessary all the same. My sister knows when people stare at her like a circus freak. No words need be spoken. No taunts necessary. She's had to deal with it her whole life while riding the bus, while working in an office, while singing at church. The upside is that all of those things have not been automatically closed off to her to begin with. And to me, when I see or hear the word tossed off too easily, it opens up the possibility that she, or others like her, will face greater obstacles like they did not so long ago.