I understand and sympathize with both of these opinions. Myself, I'm torn on the issue. On the one hand, I'm uncomfortable by it, not because I think it's offensive, but because I think it's unoriginal. As a sarcastic zinger (a topic in which I am well versed) it's not really very funny, and as a harsh cut down (another topic I know something about) I think it's just unoriginal. In my opinion, if you're a person who uses the word retard or retarded on a regular basis, you're probably pretty low class, and I don't think you're funny or interesting. On the other hand, I do believe in the Lenny Bruce school of thought, that words, themselves, are meaningless, etc. etc. and people take things too seriously these days. On the other hand, however, if anybody ever says it to my kid with autism, I'll flatten your ass to the ground in 2 seconds flat. I assure you that if I ever learn about the word being used about my kid at the school, we will all be forced into general assemblies and workshops so we can learn about alternative ways to express ourselves.
So, I'm torn. This morning, though, we're standing on the sidewalk in front of school and Child 2 asks me to zip up his sweatshirt because he's cold. I was having some trouble jamming the little pointy metal thingy into the little metal zippy thingy and he says "what's taking so long, I'm freezing!" and I said "I'm sorry! I guess I'm ziptarded."
So, I guess I'm perfectly okay with its use as long as it's self-deprecating. Oy.