Are people still really refering to each other as 'retards' and saying things are 'retarded'?

Yep. Some folks act that way with no regard for sensitivity. But when you call them what they actually are, it's insensitive?

I saw a moon-landing denier use it today on Facebook, in response to a post about the passing of astronaut Jim Lovell.

It used to be the scientific politically correct term, it simply means late in development