Right with everyone on the suspension vs. discussion bit. I just don't see that suspension is a good problem solver here, nor that it will likely teach the kid the problem with what was said.

Is saying "You're a pussy?" not a misogynist remark? Is "Don't be such a GIRL," not sexist?

Point is, if by "that's so gay," you mean "That sucks," or "That's not good," a person is very clearly being derogatory about homosexuality, making gay = bad.

In fact, I'd posit that if there's even a question that "that's so gay" as insult isn't homophobic, we've got our answer on a) how pervasive and acceptable homophobia is and b) how inarguable so many people feel it is that being gay is a negative trait.