Who am I to judge, whatever rings your bell!
You know, your reaction here is quite interesting. I don't watch beauty contests, and it's probably the least interesting thing to me. It seems logical that since this isn't a male sexual fantasy contest (maybe it is to you), that there are objective standards of female beauty which the contestants are judged against. If a former man is able to meet those standards to a degree where people don't even know she's a man, then seems to me like that's a pretty big accomplishment.
If you are the kind of guy that has uncontrollable sexual urges/fantasies whenever something in a skirt crosses your path, and has an "oh noes" moment when you realize you were checking out a dude... and/or are somehow sexually fascinated by this subject, then that's all on you. And it's pretty sad.
Do you want to have a lively debate the philosophical aspects of medical science being to a state where a man can pass as a woman in a beauty contest (and be a finalist!), and explore the notion of objective standards of beauty across gender lines, or even the basic topic of gender equality? Or just make funnies about "teh gheys" like a child? Up to you.
True, but I support the right of these contests to have their own rules. If a transexual who have been whittled and enhanced by cosmetic surgery can enter the contest, then why shouldn't females who have medically altered their appearance be able to compete as well?
Just pass a "no cosmetic surgery" rule and you should be OK. That is, until some poor thing who had a car accident as a child and recovered to win regionals enters the nationals only to be refused because a doctor had to fix her face.
If it was born a male, it will always be a male.