It has been overused and applied to people who are not gay so many times it has practically become an insult with no meaning or sting. The shortened form is "fag", which also means a bundle of sticks, and sounds slightly more sharp when said or typed.
Note that it is seemingly male-specific and rarely, if ever, applies to females (lesbian or not).
A word that used to be an offensive term for homosexuals, that is now used by gay people to describe straight people, much like the way black people call white people nigger.