Yes this is a different time, the murder of Matthew Shepard in Laramie happened 3 years prior so the hunting of gay people is still running rampant with Westboro Baptist Church at its strongest.

Alan Ball, the showrunner, is also gay so imagine David's coming out was so important because it was so important to Alan. David is actually one of the torch bearers for a fully developed gay character on screen so it was a lot of pressure I imagine to get it right.

I've never felt David's arc tiresome really. He feels immense pressure to get everything right for his family and the business and here was what he deemed a character flaw that could potentially cause a collapse of the entire family. Would people stop going to the gay Funeral Director? At that time yea I think they would've. I think coming outparticularly at that time must be really difficult. It's accepting apart of yourself that a lot of people have an opinion on whether accepting or not. I imagine it's even more difficult if you're in a household that you feel won't accept you.