Yes, it can be seen as nit-picky, but I don't think the person is pretending the connotation doesn't exist. Maybe they're just trying to start the long process of de-teething that connotation so that in maybe 50 years saying someone is gay might actually mean, once again, that they are extremely happy.

It's a next to impossible task, like the people who would like to reclaim the swastika back to its original peaceful meaning, but it's great to try.

It seems to me that it is more important to speak out against the use of “gay” as an insult and to denounce those who do so as homophobic.

I wasn't trying to be nit-picky, as nekopa discerned. I am aware of the derogatory connotation and choosing to dismiss the homophobic person by treating them like an ignorant child. I've rarely seen argument ever convince someone they're wrong; Instead, I do not legitimize their bigotry and save myself valuable time.

Like a person using a racial slur -- they immediately demonstrate the quality of their character.