I don't friggin' believe this. I bet thirty years ago some people were making the same argument about allowing pregnant teens to keep attending their local school; "How do we explain this to the kids?"
I was in a middle-class high school in the mid-1970s, before the teen pregnancy epidemic. Two girls attended my school while visibly pregnant, and back then it was a really big deal. Expelling or hiding those girls wouldn't have "helped" because everyone in my crowd was already having sex.
GLBT people are among the most decent and honorable people I know. If they want to serve in the military, the country should consider itself lucky. Besides that, the military is short of soldiers as it is. It can't afford to turn away qualified people. (Does the term "stop loss" mean anything to you?)