Groothuis is disgusted by it, and finds it a "sinful sickness" that is "a sure sign of cultural decay, bone rot, disintegration and dissipation". But nowhere in his little rant does he explain why it drives him nutty.
Transvestism occurred and occurs in many different cultures; the idea that it is a "sure sign of cultural decay" doesn't seem supported by the historical record. It doesn't appeal to me, but then again, neither do tattoos, or heavy metal, or Christian fundamentalism. All in all, it seems pretty harmless -- certainly more benign than the dangerous nonsense that Groothuis routinely espouses.
I think Groothuis should examine his own feelings more closely. Why, precisely, is he so disgusted by the sight of a drag queen?