Just because their subjective well-being improves doesn't mean the problem is solved, and you'll see that even after 'treatment' they are still much more likely to commit suicide or suffer from depression compared to the general population. My personal hunch is that, again, these people have a mental illness, but we as a society have framed it in the way that if they just get surgery we can fix their dysphoria - when they get the treatments and then they are just as unhappy, or only slightly happier than they were before, this is sort of the end as they see it. This would also explain why so many of them kill themselves after they have treatment.

Also, though I'm trained as a lawyer, I also have a BsC with an interest in endocrinology and I'd suggest that nothing in the human body besides the brain is more complicated than one's hormones and their interactions inter se. I'm a big believer in modern medicine, but I do think we have too high an opinion of ourselves as a species when it comes to our ability to control outcomes vis-a-vis a person's hormones.

These treatments clearly don’t solve the underlying issue. The question is simply are they the best current alternative for a subset of the population. That is supported by hard data, even if the surgery is rather barbaric we simply don’t have the technology to do a better job while either keeping someone their old gender or swapping to another.

As to having a mental illness, that’s often how we describe issues we don’t understand or have the ability to treat. Stress ulcers are a great example of such classifications. I am not disagreeing that many of these people have significant mental issues, but calling something a mental illness isn’t specific enough to do anything with and tends to be used dismissively. Further once the underlying cause is discovered we stop thinking of say mercury poisoning as a mental health issue.