1. Whether you consider him funny or not McFarlane is a satirist. He uses humor to comment on society and pop culture. Therefore Palin shouldn't have a problem with his use of the word retarded or using retards for satirical purposes, based on her own exclusion of Rush for that very reason.
2. The word retard has very much taken on a new meaning and is not used to demean "mentally challenged" people. It is used to demean normal people who act as if they don't have full mental capacity when they do. And would never be used by most people to insult an actual retard. Cause really, who doesn't love retards? God's little broken mirrors of humanity.
To me those aren't excuses as much as realities that Palin denies to make herself feel better and win political points.
Fag is part of the vernacular. Americans need it! It doesn't mean what it m... I mean you're not gonna call a person who's homosexual "fag". No one with any sense uses that term in that way.
The funny thing is that vernacular use of the word nigga was popularized by African Americans, changing it from an insult to a term of camaraderie; similar to Mexicans using guey (literally translated a castrated ox).
On the other hand terms like retarded, gay, or fag/faggy have not been popularized by the people being referenced.