In saying that you seem to be expressing a belief that gender is determined by genitalia. Other people define gender differently, in more subtle ways. That doesn’t mean they are trying to “do away with gender completely.” Rather, they are trying to find ways of describing gender more precisely according to the ways different people experience it — words and phrases that allow for expressing a model of gender that is not simply male or female. Sometimes the truth value of beliefs is a matter of approximation, not absolutely true or false in a binary way.
I’m a big supporter of allowing people to live according to their own personal experiences, but when we start toying with concrete classifications such as “male” and “female”, I fear that we’re just making the world a more confusing place. Taking a word that conveys a clear-cut distinction between humans — gender — and allowing its meaning to be defined by however an individual feels about it, seems like throwing away the original definition of the word. Where does it end? Can I redefine the definition of the colour brown, because I don’t like the way that my brown eyes look, and I’ll be offended if anyone labels them as brown?
I’m sympathetic with the fact that some people feel trapped in the wrong gender, but in my opinion, we cannot redefine the meaning of the word without creating a more confusing world. He/she are based on biological facts, and unless our biology changes, they should be labelled as such. In saying that, I’m supportive of gender transition surgery (although I don’t know a great deal about the positive effects,) and so would be happy to use the appropriate pronoun for anyone who undergoes it.
I guess it’s a question of value for the individual vs value for society. I don’t believe that redefining an important word such as gender should be taken lightly, without considering the effects that it might have on society.