First, let me send you to an article in the New York Times: W.H.O. Weighs Dropping Transgender Identity from List of Mental Disorders.
There are lines we've drawn in medicine: a fever above a certain degree is not normal and indicates a pathological process. A tumor that will spread and debilitate you is not normal and indicates a pathological process. To be pervasively sad, uninterested in the things you enjoy, and want to kill yourself is not normal and indicates a pathological process. And to hear voices and believe that someone is monitoring you when no voice or stalker or agency is there, is not normal and indicates a pathological process.
In psychiatry, the line gets blurry at times: to be sad, fatigued, and uninterested is normal if you're grieving. And even with that tumor -- suddenly, as ClinkShrink will tell you -- there is this funny question of whether doctors should remove your tumor or just kill you with physician-assisted suicide. In some cultures, those voices you hear, or those seizures you have, may not indicate pathology but visitations from God that hold you not as ill, but as superhuman and special. You prefer your intimacy with little boys? In Ancient Greece, it may have been fine, but in modern America, if you act on it you spend time in prison and get labeled, stigmatized, and restricted as a sex offender for life. And homosexuality with a consenting adult-- who even notices anymore? Unless of course you live in Saudi Arabia or a variety of other middle eastern countries where they just execute you.
When I was in training (oh, that was a while ago), Gender Identity Disorder was considered rare and pathological. Even before that, I remember a lecture in my college Abnormal Psychology class. The professor was Martin Seligman, well known for his book, Learned Helplessness, and in discussing gender disorders, he mentioned that he traveled a lot and when he woke up disoriented in strange hotel rooms he always knew two things: Where the bathroom was and that he was a man. Okay. It was his introduction to his lecture on disorder of gender: it's not normal and you're not supposed to feel like something you're not. I have no idea if Dr. Seligman's ideas have morphed with the decades.
In my clinical experience, it seems that gender identity issues came with a slew of distress. People with these problems often have other issues as well: problems regulating their mood, self-injury, and a host of emotional and interpersonal issues. Are these issues part and parcel of Gender Identity Disorder, or are they the result of societal disapproval? If we just accept transgenderism (is that a word? It should be) as being perfectly normal --or at least not pathological -- would the distress that accompanies it just go away? Can we create a world where people choose their gender, or where they lie along a spectrum of male-femaleness, and their parents and society are completely open to the idea that one can choose and this is fine? At what age would we allow for hormonal treatments? For irreversible surgeries? Does health insurance pay for these treatments if it's not a disorder? I have no answers for this, but I find it fascinating that illness --and criminality-- are things of flux that change in time and with culture. Funny to grapple with in a world where we make such a big deal out of which bathroom you choose to use.