My son was originally diagnosed as retarded and "rode the little bus". He was higher functioning and was usually considered one of the cool kids. But his classmates were often suffering from autism, Asburger's, Tourette's and a host of other problems. Ridicule is not confined to children. I have been around adults who think "the dummy" doesn't know or care what's going on and so feel free to ridicule. These same geniuses think it's funny to torment the homeless.

That said, context determines all. I wouldn't see this movie for all the money in the world - it's pure crap. But maybe the R word fits the script. I can't think of a movie I have seen in which any character who calls a mentally challenged person "Retard" is not the obvious bad guy. loser. hateful human being, etc.

Jacqui and I constantly taunt each other with "silly old bat" or "daft old bag". When I said I was considering prostitution to supplement my income she asked "Will you be selling yourself by the pound?"
In context, funny. Under other circumstances, downright mean.