When I was a kid, "That's retarded" was the common colloquialism.
When I was a teen / young adult, "That's gay" ended up replacing it. (I'm gay, and I've always thought this was terrible, but the set of people who say it and the set of people who care that it might be offensive do not seem to intersect)
Interesting that it is reverting to a previously trendy idiom. I wonder if people are gonna start saying again, "That's phat!" or "That's wicked!" or "That's sick!" (meaning good)
When I was a *little* kid, before the "retarded", there was "That's so lame!"
No one, besides me, has ever mentioned that it might be offensive to those who cannot walk. /shrug
Jargon, and language in general, is like a force of nature. It changes over time and there's very little anyone can do about it. The kids who use it the most, are going to be MORE inclined to use it, if adults deem it questionable. Like any fad you don't like, it might be best to just wait -- the lingo will change with the seasons just like fashion.
You have to pick your battles in life. There are a lot of injustices in the world that are much more worthy of fighting against than what minority group teenagers are denigrating this year.