The way I've always seen/interpreted the issues with that word is that by equating the mental disability with stupidity, it's equating the people with that disability with something negative. In other words, it's true that said disability means someone is less intelligent, but there's a difference between that and calling someone stupid. I wouldn't call someone with Down's stupid just because they can't figure out algebra. So I think the criticism (one I largely share) is about crossing some wires. It seems like that use of the term is equating having the condition with something bad. It's little different from how "gay" was once used as a synonym for "bad" just across the board, and I don't have a hard time seeing why that's not cool, either.