It's a slur, that's why. Some slurs are major slurs that are considered offensive even when it's not referring to someone, and I think this is one of them. They're often forbidden because of it, and a lot of people find it easier to follow universal rules than to check the rules of each place they post, because the universal rules will keep you in the clear 95% of the time. And even if not, it's still respectable to not want to use slurs.

And yeah, it did used to be a lot more common. And before that, it was a medical term. That's the way it goes, we have a word to insult people's intelligence, doctors deal with patients who have a disorder causing that, they don't want to use the mean word to refer to the patients, they come up with a new word for it, the word gets out, and then everyone makes it a new word to insult intelligence. Though this one seems to be taking a different track because it hit modern sensibilities, and at the same time I think doctors now know better than to come up with a new word for mental deficiencies.

We used LOTS of words then that are now not ok to use. Growing as individuals and groups is a good thing, being attentive to others is a good thing, understanding that you see no offence to a word where others do and changing that behaviour betters everyone.

People used to use the n-word all the time, so it must be perfectly OK to say!

This is the exact same argument. It doesn't work, right? Why would it here? Sure, there may (I doubt it, but I'll leave the possibility open) be other reasons why it's OK to say, but throw that argument out.

Yeah you're not supposed to even say "my son's reading skills are somewhat retarded but we hope he can catch up to his peers". Or "Progess on Trump's border wall has been retarded for various reasons."