this is EXACTLY it. the rise of social media and demise of legacy media weaponized politicians to create flamewars over issues which are great for winning elections but have no real meaning for our day-to-day lives. wokeness, transgender athletes, how many genders we have on the web forms to choose from, how many "immigrants" are we going to deport... are entirely meaningless for 99.98% of the population. instead of talking about how to move the country forward the public discourse is now filled with meaningless "social wars." I do not see a way out of this and I am about as optimistic of a person as you'll find... I mentioned to my colleague few weeks back when we had to change the gender dropdown from tens of options to just two to just stash the changes till 2028 when we'll get 983 options for that same dropdown :)
Personally I don't see a use or benefit of large gender dropdowns. Either keep any existing m/f or simply remove it if you don't need to adress them as her or him. Imo making lists increases chances for stigmatization.
Most internet forms that ask for gender have absolutely no reason to care about that information. Basically, biological sex should matter to healthcare professionals, and gender should matter to virtually nobody. So yes, "simply remove it" should be the answer to this most of the time.
"Large gender drop downs" is a canard, three is a large number for the purposes of their argument. It's not about gender dropdowns of any size other than exactly two as it's about strict enforcement of a rigid, patriarchal class hierarchy.
Accepting "the purpose of a thing is what it does" is important for these times. So is avoiding the epistemic traps of disingenuous actors.