Oh yes... the names of peoples and nations are
properly capitalized in English. Gays are a people. The only proper excuse for writing 'gay' without a capital letter would be if one means "happy and light-hearted." There are, after all, many gay Gays (as well as the usual crop of surly, bitchy ones).

"Imposing" language upon people is at once an immensely difficult and utterly simple prospect. Sure... people resist such things. Resistance, however, is futile (did I just type that?) Language is an instrument of usage. There are any number of hideous neologisms and malapropisms that I have railed against for decades now... all to no avail. Take, for instance, that ever-popular American "carrot and stick." The classic illustration of the phrase "carrot on a stick" is of a donkey pulling a cart being ridden by a boy. This clever lad bears a short pole, from which dangles a nice, tasty carrot, and he induces the donkey to pull the cart by dangling the carrot just beyond the creature's reach. The boy is not going to strike the donkey, he is only bribing the donkey. Actually, he is cheating the poor beast, since the carrot will perpetually be just out of reach, no matter what the donkey does. Think of it as the usual hijinx the Democratic Party gets up to every time they want money and votes -- the carrot dangles from a stick. Any sensible donkey would decline to pull the cart under these circumstances, but donkeys are not sensible.
Alas, there is also that oh-so-American notion of "speak softly but carry a big stick." Americans love their big sticks. It's not such bad advice.
Somehow, the 'carrot ON a stick' has become a 'carrot AND a stick.' The poor donkey is no longer cheated... he is offered one carrot in exchange for pulling the cart, and if he declines the offer (which really is much too low), then he gets whacked with the stick. I have long felt that if this sort of gangster-like activity really is common enough to merit entering the English language as a catch-phrase, then some clever person ought to make up one. There's neither call nor need to go mangling perfectly good and long accepted sayings.
Times change, language changes, and there's very little anyone can do about it.
Usage is king.
If there is something Gays wish to say in a 'Gay' way, then let them do so. If people wish to understand what is being said, then they will learn the new words. The trick is... if one wishes to BE understood, it's generally wise to use the old ones. You have to stop caring if you're not generally understood to employ argot effectively. That, after all, was the entire point of Polari... to not be understood by those who did not understand. There is a place for such behavior. Most every social group, no matter how small, deploys its own special jargon to confound the uninitiated.