A) Time changes culture and language. I have no way to measure, but “idiot” could certainly have been on par with “retard” in its time.

B) The coopting of “retard” came at a time with a more mature disability rights movement. With the ADA passed in 1990, disabled individuals had a much greater capacity to speak out against the theft of their language than was possible in previous iterations of this pattern. You mention this a bit with your “peak internet era” comment, though a more charitable reading of that sentence might be that internet is allowing disabled people to get together and voice their experiences of being harrassed and abused in conjunction with the word, really speaking out for themselves rather than taking it lying down.