(NB: I fall within the gender binary. Ask someone who doesn't.)

I can't imagine many scenarios when it is actually necessary.

I just found a good article about how doing Male/Female/Other is problematic, called 'The Gender Ternary: Understanding Transmisogyny' [1]

Diaspora solved this by making gender a text field [2]. Seems like the most inclusive.

[1] https://radtransfem.wordpress.com/2011/12/12/genderternary-t...

[2] http://www.sarahmei.com/blog/2010/11/26/disalienation/