I think it looks pretty stupid, as well, but I read a Rolling Stone review that makes me think twice. Basically, he says that no, it isn't an authentic view of medievel times, but it is a hell of a fun movie. I personally don't go to movies to get authenticity, I go to have a good time. Fantasy is all about the suspension of disbelief, that's what makes it fun. Who cares if they use modern slang? Do you really think you would be able to even understand the movie if they spoke in Old English?
Edit: Crouching Tiger Hidden Dragon did poorly in Asian markets because the lead characters were speaking Mandarin, when that is not their native tongue. Asian audiences knew it and were unable to get past the poor speech. Yet, that was more authentic to the period and setting they were portraying.