To retard, grammatically, is a verb. The word unquestionably outdates its use to identify people with Down's Syndrome. I don't really understand how a word that doesn't apply to people with DS anymore (medically speaking) is still considered an insult toward people with DS even when not talking about people with DS. I guess if you call a person "retarded," you are invoking that definition. But clearly if you call Playstation "retarded" you don't mean that it has DS. I'm not a fan of taking offense every time the word is used because my brother's sister-in-law's best friend's kid has DS.
To me, this JonTron guy used the word effectively. He expressed it once, his audience told him he was rude, he then went and expressed the word again. Looks like he was using that word to demonstrate that he wanted to be perceived as an asshole. Mission accomplished JonTron. Awesome dialogue on swearing. Reminds me of George Carlin's "7 Dirty Words".