Flatlander
Grandmaster
No, it isn't. Referring to a gay person as gay is perfectly acceptable, according to the many gay people that I know. They call themselves gay, they are gay, they're comfortable with their sexual preferences, and consider the term to be acceptable, accurate, and appropriate. Many gay men will use the term "fag" as well in reference to themselves or other gay men.You didn't use the n-word either, but calling someone "gay" or "fag" is functionally equivalent to calling someone "n-word".
I have to agree with Cryozombie here, the problem is with the intent, not the word itself. If a youngster calls another youngster "gay" in an attempt to slander them, as in "You're so gay", and mean that there's something wrong with you, the harm is in the implication that 'gay' equates to 'bad', or 'wrong' or 'unpalatable'. But if you're speaking with an acquaintance and they refer to their same sex partner and you respond, "Oh, I didn't know you were gay," there's simply nothing wrong with making such a statement. It may be an uncomfortable moment, but I see no insult in those words.