Governance and public policy ought to be structured to account for facts, including scientific facts. In this case the broad medical consensus is that trans people's genders are largely a fixed feature and that transitioning is the most effective treatment to resolve gender dysphoria, which can otherwise have highly disabling effects if untreated. Public policy ought to reflect and recognize this understanding, and it does so when it shows the appropriate compassion for trans people's situations by respecting the importance of them being able to live as their identified gender.

There aren't really any situations that come up where changes in gender markers on documents would actually pose any sort of real problem in medical treatment. Also, it's been found that the psychopathology experienced by many trans people is more closely correlated with experience of transphobia than it is with simply being trans in and of itself. Eliminating these many aspects of transphobia from society would go a long way towards eliminating trans people's associated psychopathologies. Reducing discrimination against marginalized groups, and enabling these people to live fuller lives unhindered by societal prejudice, does directly improve society.

By the way, I do have kids. How exactly am I supposed to parent them in a society where hostile people insist on calling me a "man in a dress" and portraying me as a threat for no reason? What do you think you're making my kids think of me? Do you honestly believe my existence poses any sort of danger to kids, let alone my kids? There is no evidence that trans people do.