I'm pretty sure the word 'bastard' is also used in a derogatory sense, but no one cares about that...
The word 'gay' has stuck as a generic insult with no hint of homophobia in common conversation. I'm beginning to feel that most of the problem stems from people being offended by it in the first place. All this is doing is reinforcing insecurity amongst the gay community. Prejudice against homosexuals is the past, they are now just another boring and normal group in society, like the rest of us.
I find myself referring to inanimate objects or situations as 'gay', but notions of homophobia never cross my mind.