My sister is a psychiatrist and has the same opinion on the subject.
There's nothing wrong with postulating and analysing it, even if the views are perhaps unpopular. Nothing should be beyond discussion even if it's uncomfortable for some people. Without making a judgement (I have no opinion on this myself), all arguments need contrast.
My sister is a domestic violence legal clinic attorney and doesn't. I guess we're at an impasse.
We are of course in the weeds here. The question was, "does Raymond still think the way he did in that post from 2002?" The evidence seems dispositive: yes.
"So, why do we not treat self-reported transsexuals as insane and in need of treatment for a delusional disorder? I can anticipate a lot of possible replies; the trouble is that all of them apply just as well (or just as poorly) to the case of BIID or delusional paranoia."
ESR is a blowhard conservative, but he does tend to at least have nuance in his position, which you seem to be ignoring.
This is a hostile environment, nobody can have a rational conversation about this without burning a lot karma (of which you have more to spare).
Nobody here except those that have those experiences has anything useful to say about non-cis gender identity. Possibly also psychiatrists/psychologists not married to a particular ideology on the topic. From my admittedly few conversations with transgendered people, it's complicated and there are no easy answers to what precisely it is.
Part of the problem is you're using "delusional" stigmatically, which damns you and poisons the conversation.
Let's assume you mean "fair" in the sense of "reasonable", not "equitable here".
Let's assume you mean "delusional" to mean "maintaining beliefs not supported by evidence and refusing to change said beliefs once presented with evidence". I'm going to leave off a stronger clause that would include non-falsifiable beliefs, because that way lies all manner of distraction.
Let's also assume that you mean "gender identity issues" to comprise a spectrum, ranging from "I am trapped in a body which feels wrong, I must take drastic action" all the way to "I tend to think more similarly to members of the opposite sex." Note that this range is supplied only by way of example: human gender and sexuality, as well as subjective experience of same, is wide and varied and I will not claim authority on what is and is not a valid experience there (as coolsunglasses has rightly pointed out).
With that understanding in place:
Is it fair to consider everyone with gender identity issues as delusional? Hell no--such issues may manifest with a completely normal and sane person, no delusions required.
Is it fair to consider everyone with gender identity issues as perhaps being delusional? Yes, but only insofar as they may exist in the subset of (delusional && GII) instead of merely (GII). It's the "perhaps" or "may" that turns it into a logically reasonable statement. Whether it's a likely membership is something else entirely, and I suspect that that likelihood is quite low--I don't think that possessing GII correlates strongly with delusional thinking.
Your statement of the question made it very easy to answer in a way that looks bad unless a lot of specific context is brought in--context which you did not supply.
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At any rate, ESR's statement there was not posing the same question you were: he was asking first "Why do we not treat these as mental health issues?" (a stronger statement than your "might simply be delusional") and "Why do the (predicted) explanations for why we do not also hold up for, say, paranoid delusions?".
For the record, he screwed up by not enumerating the expected explanations. He also screwed up by not explaining how he might consider the application of one of the explanations to paranoid delusions.
I disagree that we ought treat the transgendered as insane, but he didn't make that claim: he simply asked a question. If you read it rhetorically, then I can see your grievance; that said, I think it was meant in earnest.
You're applying a lot of charity to what Raymond wrote, which is a good thing; unfortunately having a full context for all of ESRs positions on a variety of issues has burned away most of the charity I could apply to him.
Like I said: there's a pattern to Raymond's public policy writing: people who look and act and think the way Raymond does are valorized, and people who don't are stigmatized. In isolation any of his beliefs might be defensible (as you're trying to do with this particular one), but taken as a whole, it's hard to believe that the problem is "everyone besides Raymond", rather than just Raymond.