The point isn't to just not call a 'mentally handicapped' person by a slur. It's to prevent the stereotyping of a whole class of people by comparing them to someone doing something wrong or unintelligent. In "Paypal went full retard", what you're really saying is that Paypal did something that is so wrong that only a mentally challenged person would do that, which promotes a stereotype that mentally challenged people do bad things.

By the way, the euphemism treadmill of this subject has proceeded to the point where "mentally handicapped" and "mentally challenged" are also now politically-incorrect. The preferred term is now "intellectually disabled" or "learning disabled" (which to me is far more insulting than "mentally retarded", from a literal perspective, but less evasive than "developmentally delayed").