It has become socially unacceptable to use these terms casually because the
majority of our culture (society) has a belief that they are hurtful,
derogatory or misrepresent the persons the terms are frequently associated
with. Most people recognize that words and labels can hurt other people -
and some of these people can't defend themselves.
"Mentally Retarded" ceased to be a simple medical diagnosis term when it
became an intentional, derogatory label used to lower the status of one
class of people below that of other classes. It made it easier to treat that
lower class differently, to lock them away in institutions and deny them
basic human rights and a quality of life. The MR were and sometimes still
are treated as sub-humans.
How does it degrade the kids?
Simple, and you've answered your own question. Why aren't they just "kids"?
The implication by extension is that these children are different, but
lesser. They are apart and not normal - and obviously thats true to a
degree, but the point is that it's not these kid's fault that they are MR,
and as humans should they not be given the opportunity to have the best
quality of life that they can aspire to (with or without assistance)?
So whats wrong with calling the kids "Tards"? Because it's insensitive - and
desensitivty leads to apathy, bigotry and hate.