I think what they are trying to do is protect other students as well as the transgendered students. You can't expect people to change their views of what is male or female over night and many people will still look at this transgendered person as one specific gender, usually not the gender intended. Hey, what is this guy doing in the ladies room? Why is this lady in the mens room? etc. It's a step in the right direction

There is a solution to Arizona’s dilemma on transgendered people and their toilets.

Unisex toilets. Wal Mart has them in their newer stores. Home Depot has them and many department stores have them.

Instead of assigning a student a private room, install a unisex toilet and save the extra cost of a private bath.

I am transgendered and I shop at places that cater to my needs.

The University of Arizona is on the right track even if it’s kind of a side track.

Yeah--the rule seems to be designed to help out folks who are in the process of transitioning and might be "known" as their assigned gender or might not consistently pass as their preferred gender. It's best if a policy like this is optional, as it would be kind of crummy to just relegate people to a kind of "transgender ghetto" to make everyone else more comfortable, but hey, who would complain about getting your own room and bathroom in the dorms?

As for trans folks being "allowed" to use bathrooms appropriate to the genders they are presenting as, well, as some others have said, trans folks do that all the time and it's not anyone else's business what's going on under the clothes.