You only have to look at how the terminology for people with 'leaning difficulties' has 'evolved.'
Backward, retarded, remedial, slow learners, special needs all used legitimately in the past and now forbidden. Yes, even 'special needs' has recently gone the way of the rest and now 'learning difficulties' is the sanctioned term. I wonder what will be next?
Mongols of course are 'Down's Syndrome, whilst fuck knows what happened to 'spastic'. If you used that term now it would provoke outrage
, yet once was a completely legitimate term as shown by the Spastic's Society who used to have charity boxes all over the place.
'Spazz' and 'mong' were always naughty words tho! 
Whether or not you bullied kids at school Nik (I'm not suggesting you did), when I was at school kids got called Pakis, spastics, spazzoes, mongs and various other names. Unfortunately it's what kids do. And no it has nothing to do with parents necessarily, it has to do with looking different. I got called four-eyes until I was about 12. Kids say and do things to look 'big' in front of their mates and they'll go for an easy or minority target, safety in numbers, cowardice.
I do get fed up with the many who say kids are in some way 'pure' until tney get corrupted by adults, that's bollocks, unfortunately it comes naturally to a lot of kids, it is to a large degree literally human nature. The adults are there (hopefully) to stop them doing this shit, unless perhaps they never grew out of it themselves

. I would also mention here, that yes, we did have the archetypal gorilla PE/Rugby Teacher, who delighted in calling underperforming kids
spastics, and he would take the piss out of any pupils with Welsh names because they'd always beat the shit out of England in the 70s (mind you he did recognise they were bloody good). There was a gormless 'innocence' about him and by and large we all laughed around this, despite him being a hard bastid it wasn't meant nastily. Nevertheless, he would certainly have upset some sensitive kids.
The thing is with previously-used names like Mongol, Spastic or whatever, they are short names which kids can easily use to label or bully others. That's a sad fact. So if you change the name to Downs' Syndrome or Cerebral Palsy then it becomes too much of a mouthful for kids to go spouting it off in the playground. Sadly, I think those kids will simply find another way to bully or upset other kids, at the end of the day it's not about names, it's about attitudes and having some empathy for other kids. For many kids, that needs to be taught.
When I was about 14 we had an immigrant kid whose family had come from Ceylon, joining our school. That first winter he pretty well passed out on the rugby field, from sheer cold. After taking the piss, even the rugby teacher looked out for him. He was shit at rugby but became bloody good at cross-country running. And that was good because continually running keeps you warm

. So he ended up doing that for 2hrs in games every Friday afternoon, triple-period

.
I'll also say, the kid was very clever and popular, and in my ignorance I and one or two other kids would playfully say he 'smelt of curry' (he actually did, unsurprisingly). He got called 'Paki' by some of the ignorant twats in the school, and we would defend him (and he'd help us out with our Maths homework

). But one day I was mortified to find him crying because of the curry jibes, because we were meant o be his mates, and that hurt

. From that day on we never, ever said it again, not only that, he brought some of his mum's cooking in for us to sample, from his Tupperware box at breaktime

.
Lasi heard he was training to be a Doctor, I hope he made it. Lovely lovely guy.