Reading (actually listening to) Steven Pinker's massive Better Angels of our nature, I came across an interesting section on the use of the word "gay" as a pejorative. there was something of a storm a few years back when Chris Moyles of BBC radio 1 used it on air and there is a lot of hand-wringing about this modern usage; I always feel a bit guilty when I say it.
However Pinker presents evidence to suggest that perhaps we shouldn't feel so bad. Referring to a survey of American views of homosexually, he notes:
Many people have informed me that younger Americans have become homophobic, based on the observation that they use “That’s so gay!” as a putdown. But the numbers say otherwise: the younger the respondents, the more accepting they are of homosexuality. Their acceptance, moreover, is morally deeper. Older tolerant respondents have increasingly come down on the “nature” side of the debate on the causes of homosexuality, and naturists are more tolerant than nurturists because they feel that a person cannot be condemned for a trait he never chose. But teens and twenty-somethings are more sympathetic to the nurture explanation and they are more tolerant of homosexuality. The combination suggests that they just find nothing wrong with homosexuality in the first place, so whether gay people can “help it” is beside the point. The attitude is: “Gay? Whatever, dude.”(Pinker 2011:619)
In short, young people may use the word "gay" more often than older people, but they are also the group with the most tolerant views of homosexuals. It's therefore difficult to equate using "gay", in this way, with being homophobic. That's not to say that it wouldn't cause offence, but that it's likely none was intended, and to reinforce this, when questioned kids often adamantly deny they are homophobic.
Is it possible that this is an example of words not necessarily being linked to their literal meaning as discussed by me here or could it be the birth of a new homonym, reminiscent of fat/fat (later phat to avoid confusion which mirrors the recent appearance of "ghey") which was in use when I was an undergraduate or funny/funny which is, if you think about it, an incredibly inefficient word for communication, requiring, as it sometimes does, confirmation of meaning with the phrase "funny haha or funny peculiar?" These kinds of words prove that languages evolve and are not regular or perfect but messy and constantly changing. Language is so gay!
Edit: I did come across an article which claimed that heaing the phrase "that's so gay" may cause students to be more likely to suffer from "headaches, eating problems and feelings of isolation". I haven't had a chance to read the study yet.