Indeed, my bad.
You are remembering incorrectly I believe.
Norm said the bracelet he was wearing would be good for retards. Everyone started booing Norm, Will was all "DUDE?!?!? SERIOUSLY!?!?!" Norm looked instantly shamed by what he said though.
also the term retard when used as slang or an insult is an 'old' thing. People now adays know not to use it in public company.
Their over-the-top reactions are a joke, Whiskey use this kind of humour all the time (see: cunt).
Thanks, I am aware of the concept of sarcasm. I just remembered it not really sounding sarcastic and more serious. Though as my above comment can show, I don't have the best of memories.