Don't Ask, Don't Tell was one of the many painful mistakes the Obama Administraiton inherited, although this one was a gift from the Clinton Administration. This era appears to coming to an end, but we are not there yet. The SecDef and the Chairman (Mike Mullen) are in favor of repeal, the service chiefs are against it. The key, I think, is that the legislation gives the folks in Congress cover from their regressive constituents, since it gives the SecDef and the military the authority to scrap this dysfunctional and dishonest policy.
Tom Ricks has had a series of posts on this, including this one, which is really quite moving. This post and others reminds me that the military must demand a higher degree of integrity than other occupations where the risks are far less significant yet we have had a policy that demands that people lie about who they are.
One way to think about it: folks who join a country's military are putting their lives at risk for their country. Do we want to continue to say that gays and lesbians* are less American? The majority of Americans agree that these folks should be allowed to serve and serve openly (see link below). So, the public has evolved since 1992, and it may be the case that the political elites have as well. But it is not a done deal yet.
* and, yes, let's keep the focus on gays and lesbians, rather than homosexuals since the former are more positively viewed than the latter in the US.