Dropped packets are the PLC defending itself against excessive traffic. It will accept the first 16 packets in a single scan without consideration for the speed they came in, but then it switches into a protective mode, where it starts dropping packets to keep the average at 1 packet per 100us. After receiving 32 packets in a single scan, it shuts off the interrupt until next scan. You aren't getting enough packets to stop the interrupt, but you are getting enough to start throttling.
If your I/O is running on an isolated network, you shouldn't see retries at all. Running on a public-ish network, it can definitely happen. As long as retries clear it up, you don't mind the bump to the I/O update, and you never trip the I/O fatal, it's no big deal. If any of those things are a problem, you really need to isolate the I/O.