This is my theory.
Bruce, err, Caitlin, took a variety of performance enhancing drugs in order to win hir Olympic Gold Medal in 1976. These drugs caused irreparable damage to hir hormones, and slowly, chemically, deteriorated hir gender identity over the years that followed (also, living in the Khadarshian household is enough to emasculate any man).
Rather than risk being stripped of the paramount of achievement of hir life, Bruce, I mean, Caitlin, decided to succumb to the hormonal confusion raging within hir, and become a "woman", explaining the decision as some kind of fullfilment of a strange childhood identity crisis rather than blame PED's.
He may now be a she, but at least she's got gold.