I respect transvestites and all that, but that sentence is just full of it. It's idealistic crap. Language doesn't work that way. All people of all kinds are labeled. Labels are how we related the world around us to ourselves and what we know. Labels separate men from women, adults from children, sociopathic maniacs from the functionally sane, etc. You don't really mean that you don't see the need for labels. There are just some labels that you don't like being applied to some people because of certain circumstances.
Labels are necessary. If the word "weird" is unnecessary, then it invalidates antonyms like "normal." Without the ability to differentiate the usual from the unusual, we have no way to relate things to other things. Therefore, if you were to see a man walk down the street, rip off his own arm, and then proceed to eat it in front of a schoolbus, you wouldn't be able to call that "weird" because the word no longer exists in your vocabulary. But because "normal" has no meaning in a world where all things are normal, you couldn't even call it that. You'd have to call it "a thing that happened" without the ability to label it for what it is.
Sorry, but the "no need for labels" thing is one of my pet peeves. It's like when people claim to be colorblind in regards to race ("I don't see black or white. We're all just people."). It's not the teeniest bit realistic.