I think that the privilege to retag questions has become obsolete, now that one could propose an edit with only the changed tag and gain 2 rep from it.
But deleting the retag privilege and link should be wrong. So what I propose is, when proposing an edit, if the only change is a change of tag, and if the user who made the edit has the retag privilege, then the change is automatically applied and doesn't need to be approved.
EDIT: To clarify the situation let me give an example:
I wanted to make a retag, and I was half-asleep, I used the edit button instead of the retag button and only added the tag. I got 2 rep for it.
If I used the retag button it would have been taken automatically with no rep, and so it should have been in the scenario described previously.