It sounds retarded.
Not really. This goes back to when church records and headstones were written in Latin. Requiescat in pace was abbreviated to RIP and at a time when most people couldn't read English, let alone Latin, they nonetheless recognized the abbreviation, and it was this that "stuck" rather than the full phrase it represents. The abbreviation entered common usage as people learned to write and so it remains. Technically, RIP is an abbreviation of the original Latin rather than the English translation, although both phrases have the same initial letters.
Rot in pieces?
In some cases it just works though...like R.I.P.aul Walker ;-)