It isn't used, ever, to "treat" homosexuals.
Yet quiet a few trans-women are attracted to women. I don't get where you're saying it's "next to impossible," because it does happen.
Biologically, there are so many grey areas and inbetweens that it becomes apparent that we don't have a consistent method of defining "male" and "female," save for what someone identifies and presents as.
Yes, I am who I am. And once I learned to embrace and respect that, I went from being miserable and suicidal to being able to enjoy life.
Go back 100 years ago and people offered the same sympathies and defenses for racial segregation. Guess what? That legally came to an end, we call anyone against it a racist, and we, as a collective society, know we are much better off in the long run for doing away with it and not catering to the bigotry and prejudice of racists. We offered the same sympathies and defenses for keeping women out of the work place, but we didn't cater to misogyny and we are much better off because of that. We didn't cater to people who had strong objections to inter-racial couples, and we recently to those who are against homosexual marriages to bugger off.
It's a touchy subject for many because of this poison known as "tradition." And, no, the world isn't fair, but even Darwin wrote that society does not function on the principles of natural selection or survival of the fittest because we are social animals. The best we can to is to maximize and preserve rights, and the situation of barring transgender people from their appropriate restroom is to deny them rights, while allowing them to use their appropriate restroom is granting them a basic right and infringing upon the rights of no one, because, ultimately, there is no right stating that you get to pick and choose who you will share public spaces with.