Finnish has only gender-neutral pronouns and completely lacks grammatical gender. The word hän is gender-neutral and means both "she" and "he". (Source)The absurd part of the debate is when people want to call everybody "hen" (ze). Should all kids in kindergarten be called "hen" (ze) rather than "han" (he) and "hon" (she)? Should books, webpages and so on use gender neutral terms to describe all people?
In my eyes it's too extreme to force everybody to be gender neutral, and I think that those who are that extreme are few. Forcing people that have a gender identity to be neutral is just as wrong as forcing people that are gender neutral to "pick a side".
Gender neutral words are on the other hand welcome to me. There are cases where they will be useful, especially when the gender of a person is not known, needs to be secret and to describe gender queer people. It's a logical thing to do and it's strange that it hasn't been done earlier. When we encounter something that cannot be described with the words we have we invent a new word. Something that's a mix of red and blue is purple. If it's not his or hers it's zirs.
I don't see what's so upsetting about the word it self. It fills a function just as the word purple does. It's not strange in any form or way, it's a natural step to take and it's time to get words like this in our dictionary.
(The gender neutral words used in English are many and not organised and untied. I've chosen to use the word "ze" since it's the word I've seen the most often.)