First, I'm a Melee player, but noticed the thread title and was interested. In spite of all the tangents in this thread I think this is something that is relevant to the community at large. A few people have called out Lenus for saying he "knows how everyone feels," but a few people have already said it bothers them and I'll include myself in that group.
If I identify myself as gay and someone says "That's so gay!" in an obviously negative way it does impact me negatively. As has been mentioned in the thread, there is a long history and multiple meanings for the word, but the main problem comes down to "I identify as gay and this person is insinuating that gay is bad." The person who makes the comment might not even realize what they've done, but it can still be painful or annoying.
We are a community based on video games and our primary purposes are to meet other players, friendly competition, and to have fun. It only makes sense that we should try and make sure people feel welcome and non-threatened. Every time I go to tournaments and hear people yelling "gay", "******", "****", etc. across the venue I realize how unwelcoming of an environment that language is creating, both for players and passersby (depending on where the venue is). I don't typically address players individually about this because there are so many speaking in this way that I'd end up spending more time talking than playing.
I think as a community we want to be as accepting and respectful of each other as possible. I understand that some people might accept gay people and still use "gay" in a negative way when talking with their friends, but in a public space where you might not know everyone that well it can really ruin what is supposed to be a fun experience. There are really good players out there that I'd like to play more, but I get so frustrated with the way they speak that I lose a lot of respect for them. I don't think it's too much to ask that people try and be more mindful of the things they say. In general at tournaments I avoid saying "gay", "******", "****", "queer", "******", "*****", and general cussing (though that does slip), because you never know who you might be offending. It's not that difficult and I think it sets a better tone.