"BAD" words?!

How do you determine which words are ok for your children to say and which are "bad"?

Yesterday Chris was roaring at Ayden causing him to scream. After reprimanding for the unnecessary screaming I turned to Chris and told him to stop aggravating. Ayden looked away from me, picked up his toy, and said "you're stupid."

I was shocked! Did I just hear my angelic four year old call someone stupid!?! I looked around baffled. "What did you just say??" He got in BIG trouble, sat in time out, apologized and promised to not call anyone that name again.

Here's the kicker...he said it TWO MORE TIMES THAT DAY!! Referring to inanimate objects, but STILL. Each time he got in trouble. I've never heard him say anything like this before and I'm POSITIVE he picked this word up from me. I say "stupid" all the time. And after some thought, I'm now wondering...is it REALLY that bad of a word.

It seems likely he's going to eventually make this word part of his daily vocabulary some time in his lifetime. Is it a "bad" word because it's coming from a four year old? Is that why I don't want him saying it? Because it IS a legitimate word. What words should he use instead? "No, no Ayden, Mommy's not stupid...Mommy's ig-nor-ant. Can you say ig-nor-ant??"

Would that be better? Am I mad that he's using a bad word, or am I mad that he has the audacity to call someone a name? Is it ok for him to call his toys stupid? Do I have to stop saying stupid? What is the protocol here??