Doesn't the ABA require that schools take the higher score?
It requires that schools report the higher score. Generally, it indisputably looks bad if you did worse on the retake. How severely that affects admission chances depends on the school and a whole load of other circumstances.
From where are you getting your information?
From speaking to a bunch of adcoms (granted, mostly from T-14 schools, so it's a limited pool) at info sessions and whatnot - they more or less said that if you take the LSAT twice, you're expected to do better on the second time.
I do not know, however, how this translates into admissions - is it just a matter of perception? I imagine they still consider the highest score, does it put some blemish on the application package? The only thing I've been told is that retakes should be higher.