I think it can be used with respect, but it's touchy, because some people already get attacked in other contexts and develop a bad feeling about themselves. I've already insulted a friend in a joke, words can be used in a lot of ways, and it's cool. But it's difficult to know that the people is really respectful when you just hear a bunch of people calling themselves names to probably insult while being frustrated. It really depends on the context and how it's done. You can check that yourself. I know how I feel, and I know how many friends felt. And even if it's not homophobic (which I think 95% of people are not really homophobic, and in a group many pretend to be because they fear to be rejected if they don't), it can have an impact.
*****EDIT***** Or like when I hit somebody by accident and the guy calls me bundle of sticks after bumping me with his horse. There are more contexts like this. I think it's not like there isn't any problem, and we can't just let it go by saying everything is fine, and it's my perception that has a problem.