In addition to its original and continuing senses of "merry, lively" and "bright or showy," gay has had various senses dealing with sexual conduct since the 17th century. A gay woman was a prostitute, a gay man a womanizer, a gay house a brothel. This sexual world included 'homosexually-inclined' men too, as their willingness to disregard conventional or respectable sexual mores were "carefree and uninhibited" (i.e. "gay"). 
With such confusion and psychological turmoil attached to the word, I'm glad I never moved from gay = happy.
It's not homophobia to be grumpy at the co-opting of a formerly perfectly useful word. (Suzanne Thackston)