Our developmental pediatrician told us that 40% of those with "classic" autism (rather than Asperger's or PDD) also have mental retardation. They are considered "low-functioning". The remaining 60% have a normal-to-high underlying IQ and are considered "high-functioning". Kids with HFA could be moderately or mildly impaired. My DD's diagnosis at the time was HFA, moderate impairment. She's made a lot of progress since then, and at least as far as her school is concerned, she's currently in their highest-level autism SDC and she does part of the day in a class for kids with language delays only.

I would think that if the child/adult IQ is below that of normal functioning you would start to get into moderate and severe. My daughter tested moderately effected DCDM. My son is not capable of normal testing and is completely non verbal so they modified the testing to suit him and he fell in the DCDSP range. He is diagnosed severe.
I find it strange though how people think they can tell by looking at someone with Autism and not actually engaging as to where they are on the spectrum.

Im reading a book called Children with Starving Brains by Jaquelyn McCandless MD and it is full if information. I highly recommend it if your close to anyone on the spectrum.

I'm sure there's some amount of that going on but I think the other reason it skews toward "mild" is because of the increase in diagnosis. Not so many years ago, a child wouldn't be diagnosed unless they were moderate/low functioning. I would think that these numbers are pretty close to right, if you think of autism as variation from the mean, smaller variations would be more common, the larger the variation, the less common it would be.