What's wrong with it is that people are offended by it. I note your specification of "American English", but perhaps you'd do well to remember that this site is not purely viewed by American citizens.
The distinction was included only because I have no way of knowing whether it's as common elsewhere as it is here.

I understand your point, but that last comment was unnecessary, as I wouldn't have made the distinction if I wasn't aware of that fact.
I for one am unconvinced that people use the term simply to mean substandard or rubbish...
I live in a very liberal, pro-homosexual community, almost completely isolated from the rural and republican ideals of much of Wisconsin. My town encompasses one of the best Universities in the country and probably the best in the Midwest, and people here are relatively well-educated. My high school had an active and very visible pro-homosexual community, and many students participated in each year's "day of silence," honoring the homosexual community and the grief they go through (if only, in some cases, to get out of having to contribute to class).
I think I can say with some degree of confidence that out of the dozens of people whom I have heard use the word in this town, few, if any of them were homophobic. I'm not saying that
no one who uses the word is homophobic, but I would bet you everything I own that there are a great number of non-homophobic people who use the word as a basic, negative adjective.
Language does evolve, but not always for the better. Should we all no longer insist on proper spelling or usage just because some people do not care?
A wholehearted "YES," depending on the case. In my opinion, there is
no language rule that is so far set in stone that it should
never be changed. Think of all of the changes English has already gone through over the centuries (or after it crossed the Atlantic). We would all be talking and writing quite differently if we remained steadfastly faithful to every grammar, spelling, or usage rule.
Corruption to the extent of something like "txt spk" would certainly be detrimental, but do you really think such language has the capability to completely invade all written and spoken communication? I
have read about college students my age using it in replying to job interviews and other professional settings (what on earth they're thinking, I have no clue), but there are so many of us that not only understand proper English, but also abhor "txt spk" in inappropriate contexts.
Language is defined by those who use it, and I think that's the way it should be.
Gay is a word with a meaning identifying a specific group of people. It has evolved a new derogatory sub-meaning based upon fear and hatred of the people in question. Why should that be acceptable?
Because
already it's being disarmed by its widespread use. Sure, when some wannabe gangster badass calls something "gay" with a scowl on his face, he's probably a homophobe and is using the word in a hateful, albeit indirect manner. However, as I explained to
Mars, that does not mean everyone who uses the word in this unusual context is being hateful.
I know you objected to his use of the word, but I doubt you believe
BayConRong is a homophobe, or meant to insult homosexual people. His example is exactly what I'm talking about.
Someone who tries a new racing game for the first time and discovers that their favorite car is missing might say, "aw, that's gay." No scowl. No personal vendetta against homosexuals. They're not even angry (maybe mildly annoyed, or disappointed). That's another example.
I don't know any personal examples, but I wouldn't be surprised at all to learn of a homosexual using the word in this same exact context.
If I went around and called anything that was funny looking a jigaboo, would that be acceptable? It's a new meaning for the word based on a stereotype. Should be fine, in your book.
Acceptable for you to do? No, probably not, but feel free to try it in a public setting.
Acceptable after already gaining widespread usage in the context you've described (ie
not a hateful racial epithet)? Of course. Haven't you heard anyone use the N-word with the "ah" ending (described rather than typed due to word filter)? A very similar circumstance to what you've described here. And we've reached the point where white people can say it without getting funny looks. I don't mean just amongst themselves, either. I mean I casually use it to greet black acquaintances/customers whom I see at work.
Rendering hateful language "taboo" is certainly the respectful thing to do in times when its barbs are still sharp and the original, hateful meaning is still relevant. I just don't think that's the case here -- before it gained the usage we're discussing, it was (and still is) also widely used as a neutral descriptor by non-homophobes -- and the more we use "gay" to say "rubbish," as
Mars put it, the more the hateful context is forgotten.
If someone would like to continue this, we may want to start another thread.
