It's the same sort of debate that surrounds the use of "queer" and the "n-word." All of those terms have been used to denigrate the people denoted by them. And, of course, non-trans people wonder why they're wrong for using the term when we use it to refer to other trans people.
What's often forgotten is that "tranny" is most often used as a derogatory term against MTF transsexuals as well as drag queens and cross-dressers. So, along with its debasement of transgender people, the term also has an element of misogyny, which would, by itself, be reason not to use the term. At least, that's how I feel.
What do you think?