There are a a few pretty big upsides I can think of to using a simpler social gender classification system: less social friction/discord/controversy (too much of this and your country falls apart and everyone is worse off), less social confusion/cognitive burden (pronouns, as one example, have basically become a third name that you have to memorize in addition to first and and secondary names whereas they used to just be a derived property that you didn't have to memorize).