This is something that struck me recently. Around the time that the GRA 2004 was passed, I was a law student at university. The circumstances that led to the passing of the act was a number of cases focusing on discrimination against transsexuals. The case of Bellinger v Bellinger related to a post-op transsexual who wanted her marriage recognised under English law. The House of Lords rejected her case, holding that marriage can only take place between a man and a woman. However, they also recognised that the law was incompatible with the European Convention on Human Rights (right to marry under Art 12 and right to family life under Art 8) and issued a declaration of incompatibility under the Human Rights Act 1998, paving the way for the GRA. At the same time, the European Court of Human Rights had found the UK in violation of the same articles in a case called Goodwin v UK.
The result was that Parliament passed an act that allowed people to legally change their gender. However, it strikes me that the better way to have dealt with this at the time would have been through widening the category of marriage to include same-sex marriage. This would have dealt with many of the issues addressed in the cases, although Christine Goodwin's ECHR case was also based on discrimination she had suffered at work. But this could have been worked into existing discrimination law- ie that a person cannot be discriminated against for being a transsexual.
I think that once the law proclaimed that people could 'change' gender, we entered very murky territory. The problem was that we did not allow same sex couples to marry and had we just done this, Elizabeth Bellinger and Christine Goodwin would have had their marriages legally recognised. However, at the time, this was considered too 'extreme' (but 'changing gender' wasn't???).
It reminds me a bit of parents I have seen on trans-kids documentaries where they prefer their child to be trans than to be gay. It's strange that it seemed better to let people change gender than to open marriage up. If only we had realised back in the early-mid 00s that marriage should not have been restricted to heterosexual couples. Instead, we started pretending that sex could be changed, and issuing retrospective birth certificate and erasing all reference to the birth sex.
I don't think there is any going back now, but it's definitely food for thought. Also interesting that most trans people do not even bother with the GRC, so one has to wonder how effective it really was or whether it just allowed a false ideology to take hold.