I think it’s helpful to consider transsexuality as cosmetic surgery. It’s another case of “I’m unhappy with certain aspects of my body and I want to change them.” Currently, doctors in the US won’t perform this cosmetic surgery unless you convince them you’re an X trapped in a Y’s body.
The cosmetic surgery viewpoint goes beyond binary sex choices of male and female. Given better technology, in the future one could choose to be a blue-haired futanari catgirl. Why? Not to fit some story about finally becoming one’s true gender, but simply because it could be fun.
I hate to sound callous, but I don’t really care why people want to change their bodies. I am simply glad for them when they feel better about themselves afterwards.
To respond to your question: Yes that’s a bad thing, but I can extrapolate the moral trajectory. In the past, more people disliked transsexuals and total body revision wasn’t even on the map. Today, transsexuals are making inroads and some fringe people are speculating about more extreme modifications.
There are other times where I disagree with society giving different amounts of approval to things. For example, more people are for medicinal marijuana than for completely legalizing it.