This is a gray area for me.
On the one hand, transgendered people have more than enough they go through already that they don't deserve bigotry causing more problems.
They're women (in this case). That doens't mean you have to want to date a transgendered person at all; but don't treat them hatefully, either.
I support their rights as women - but isn't the tournament such a right? Well, a beauty pageant is a pretty specific situation, enough about the sexual attractiveness of the contestants, however much they want to deny that, that it seems a legitimate 'exception' issue to let them rule out transgender competitors because it's such an issue for so much of the audience.
These issues get tricky. Let's say a restaurant has a lot of racist customers so that the business is legally required to hire black waitresses - but customers stop coming over it.
The business is expected to just 'go out of business' over it rather than cater to the racial whims of the customers. And I think there's good reason for that.
And that is dangerously close to conradicting my statement on the pageant, where I have to split hairs between waitresses and beauty contestants.
On the other hand, Hooters I assume is allowed to discriminate by hiring pretty female waitresses because it's such a part of their business model. Try splitting that hair.
Bottom line is that it's not always easy to have a near clean rule - going either way can cause harm in one way or another. 'Judgement' being the rule allows for mistake as well.
It's a good example where public policy isn't always easy, trying to do the right thing.
Bottom line: transgedered women are not women, exactly. They are transgendered women. The question is where that distinction has any relevance.
Dating? Sure, by individual. Most areas? No way. A beauty pageant in around the line with arguments both ways, where I just lean towards it being one of the few areas to allow the distinction to deny them a right. It's a tough call. Let's not even get into a 'Miss White America Pageant'... trying to explain why Miss America has to be inclusive, Miss White America isn't ok, and Miss Black America is ok. There are reasons, but it's another tricky situation.
(And frankly, as the American population grows less white, as a Miss White America pageant would be less about racism and exclusion than simply in the same spirit as Miss Black America, it might even become more acceptable. For the time being, a double standard is allowed because the history of discrimination calls for some slack. The 'Miss America' should always be inclusive, though. And I'd like to see a time transgendered women are allowed, because the society treats them equally as women.)