Yeah, the short of it is that it used to be used clinically to describe developmental disorders but fell out of use around the mid-90s because, like so many other words, it was used maliciously to the point where it lost its original meaning and context.
If you were a 90s kid, retard and gay were as close as you could get to actually swearing without getting in trouble and basically carried the same cultural weight as outright slurs. The stigma around being gay was so bad that in the 2000s they made up a sexuality to describe men who were straight but liked to shower and dress in nice clothing so that they wouldn't lose their jobs. And the stigma around mental needs little explanation, I think. It wasn't that long ago that they were electrocuting people and cutting out parts of their brains for being sad or having a stutter.
Considering Biff was based on Trump in the 80s...