I'm pretty sure the United States has suffered worse "affronts" to the character of the republic; we can endure shutting out transvestites from prom.
The invisible hand of fashion, closely related to the invisible hand that decides that women and men should have separate bathrooms and the invisible hand responsible for penis and vagina having entirely different definitions.
Yes, especially in John Hughes films. On the other hand, there's a far greater mass of scholar athletes who just don't have the time or inclination to put up with some attention whore's shallow eccentricities.
Transvestites attract attention from a far larger group than "bullies/jocks/'hard men.'" Unless this is a prank, I'd be surprised if the vast majority of students outside of the Goth squad didn't exercise their freedom to be sarcastic.
Because they play a useful and fulfilling role in society. Why would you want to get rid of them?