The idea that the word "retard" in this context is hate speech, seems to be a cultural artifact.
The word "retard" simply means to delay or impede the development of something. It's used in a variety of professional and scientific contexts; the meaning of the word itself is not unclear or inherently insulting. And so, linguistically, referring to a person with an intelligence level that was impeded by some condition as mentally retarded, is not inaccurate. And as far as I'm aware, this original usage of the word for people in this category was not meant as a derogatory term.
And then it seems people used it as an insult, like you call someone a retard as an insult.
Since then, associating the otherwise acceptable word retard with mentally handicapped people is considered improper. Even though words like handicapped or challenged are essentially synonyms, in this context, to the word retarded. They're not any better in and of themselves, and the word retarded is not any worse in and of itself. It's just that the word retarded has a recent cultural history of being used as an insult, while the others were not.