

If we’re giving them the benefit of the doubt, which I don’t think most deserve, there’s also a theological argument. For religious people (specifically Christians), they believe that people are made to God’s plan. If you are born male, they believe that’s what God intended. So changing your gender is, in their mind, blasphemy against God because it’s denying his plan for you.
Of course, this argument completely falls apart when you draw the parallel to people who change their hair color, get corrective or cosmetic surgery, etc. God also intended you to be blonde with bad eyesight, but you dyed your hair and got Lasik.
But the real answer is just bigotry. They try to rationalize their bigotry, and may not even recognize it as bigotry themselves, but that’s what it is.
Microsoft has the ability to do this if they really wanted to. It would completely destroy their business if they did, though, so they won’t. I mean, who would keep using Microsoft products if the company was willing to just take it away from you at a moment’s notice?
The US government cannot do it so easily. They’d have to order Microsoft to do so. Microsoft would resist and take it to court. The US Court system makes a LOT of really fucked up rulings, but the one thing they do reliably is side with big business. I’m inclined to think that in this hypothetical showdown, the courts would side with Microsoft.