Hmm... I'd have guessed it was less about being a euphemism and more about English-speakers wanting to have a one-syllable word instead of a five-syllable

We already have more one syllable euphemisms for male homosexual than I can shake a stick at, each of which became a curse word, and each of which was supplanted by another euphemism. The most recent one previous to gay was "queer".

The same usually happens with other euphemisms for other undesirable characteristics - for example "retard".

Euphemisms do not work. If the thing being referred to was OK, we would not be looking for euphemisms, thus euphemising merely draws attention to the fact that the thing being referred to is not OK.