Being in a community that is so often assaulted by labels being used in a derogatory manner, many of us despise the use of labels for any reason. But not all labels are bad.
For example, picture yourself walking into a dress store and finding a darling dress that's within your price range. You are a size 14 and the dress is labeled a size 14. Do you immediately snatch it off the rack and run to the register to buy it? No, in order to make sure it fits, you have to try it on.
Why couldn't you do that? It's because different manufacturers have different sizing standards. You can only use the labeled size as a starting point for finding what fits you.
The same goes for terms used to label people. They are useful for starting points, but are often based on individual standards and biases. The label may be used to begin psychological counseling (whether effective or not), define whether or not you belong to a group, or any of a number of other reasons. The thing we must all remember is that they are only starting points and may not fit someone very well. They should not be used to belittle someone.
In Hollywood, actors have been known to refuse roles on television because they feared success. Such success has been known to impart a stereotype, resulting in a long-term, negative impact on their career. Those stereotypes take a lot of work to overcome, but it can be done. Perhaps this is similar to the reasons people have for refusing labels.
Labels, like dress sizes, evolve over time. What they mean today may not be what they mean tomorrow. Many of us are old enough to remember when "gay" meant "happy." Did you know that the term "Methodist" (as in the church) was originally a derogatory term, but was appropriated by that church as their preferred label?
I call myself a size 14, but I have clothes in my closet that all fit me and they run from size 6 to 18. The maker of that size 6 skirt that fits quite well was obviously way off the standard in sizing. While I recognize that fact, it does make me feel good to know I'm wearing a size 6!
Likewise, I call myself a transsexual, but there are others who disagree because I have not yet had the surgery. Yet many others who have had the operation no longer consider themselves TS, but "normal."
I don't generally call myself a crossdresser, yet many others do. Certainly if one uses the definition of "a genetic male who wears women's clothes," then I am a CD. We won't even get into the legalistic definitions of homosexuality – even I totally refuse those labels.
Labels can be useful – but only as starting points. But they can also easily be abused.
As members of a community that is often assaulted by these labels, it is incumbent upon all of us to offer some education to those abusers. They speak from ignorance (often preferred), fear (that it's contagious), or prejudice (often learned from elders). Let's all do little things to help ease their misguidance. We become stronger in doing this.