I have to admit I haven't been all that bothered by the word "crazy," except when I'm the one referred to--or my friends--or my fellow sufferers. For example, my mother-in-law would say "They're crazy about it" when she meant someone really liked something, and it didn't bother me. Should it?
I don't like "insane." Or even "mentally ill." If I use the word "crazy," I put it it in quotes, to suggest someone else is saying it. I don't use it myself, though.
"Retarded" used to mean "slowed down," but then people started using it negatively/meanly to suggest someone is lesser in some way--or even saying someone is a "retard."