Frink just explained it to you. The fact that retard is interchangeable as an insult with stupid and idiot is what makes it offensive. You’re basically calling mentally retarded people stupid idiots.
The problem being that nobody I know calls them mentally retarded. It’s a dated term. Perhaps older generations, or legal documents, or people in certain regions still use it, but it is fast falling into complete disuse.
It’s dated because it’s become an insult. Calling someone mentally retarded is still legitimate, but the retard insult has become so pervasive that people are shifting away from that (so as to try to avoid offense and hurt feelings and whatnot).
Let’s say you make fun of someone at lunch and they leave to sit at another table. If you continue to make fun of them, even if they can’t hear you, are you still an asshole?