This issue is one that always bugged me too, as someone who 1) considers himself an ally to LGBT people, but also 2) cut his teeth defending science against religious fundamentalists.
There is a real danger, which I think many younger people on the left fail to appreciate, that by failing to distinguish between phenotype (which can be a spectrum) and genotype (which in this case cannot), we risk endorsing the idea that one can only be authentically male or female by conforming to very narrow cultural notions of masculinity or femininity.