The definition of “retardation” is as follows:

1. The act or process of delaying or impeding.
2. The condition of being delayed or impeded.
3. The extent to which something is held back or delayed.

Considering that the features being complained about impede the user, calling those features “retarded” is an adequate description.

It is also in-fitting with the definition of lacking of intellectual development; as mentioned, other programs do not feature such impediments, and in the case of Office 365, may actually be a regression of features.