lametheories:

The “gay” debate can be interpreted in several ways. Whatever Dirk’s sexuality, he doesn’t like it being described in such “antediluvian terms”. This suggests one of the following:

• Dirk is expressing his dislike for simple labels (by which I mean he believes sexuality is more complicated than that)
• The world no longer sees gay/straight. The Batterwitch has made it so humans consider sexuality in the same way as trolls did; irrelevant. 

I believe given the evidence it’s likely that the second interpretation is correct. This would mean that the humans (or perhaps just the four kids) are aware of how Earth used to be. It would also mean that the Batterwitch has already effected how the world works, and Jane is blind to it. 

Also… to join in the sexuality debate, I believe this means that Dirk is pansexual in the same way that the trolls are. Which I think was already obvious, so it isn’t really all that big a deal!

I’m actually totally into this theory.