The "old system" only worked because trans people were largely closeted about being trans and it never worked for trans kids. That system is never going to survive in a society that has greater acceptance of trans people. As I said, there is no putting the genie back in the bottle.
So, what would you suggest moving forward?
It's interesting isn't it that the transgender-identity denialists expend all their energy on condemning transgender people and the rights/protections afforded to them.... without offering any coherent alternative.
As an example, I've lost count of the number of times I've asked how these denialists think transgender people should be accommodated at, say, municipal swimming baths with men's/women's/disabled communal changing facilities. I asked the denialists to consider the position of a trans woman; I gave all the available options: should the trans woman:
1) Use the women's changing room
2) Use the men's changing room
3) Use the disabled changing room
4) Be barred from all changing rooms, and have to change in their car etc
5) Not be allowed to use the swimming baths altogether?
The usual "answer" is either (2) or (3). And of course there's vehement opposition to (1). But the denialists answering (2) or (3) seem unable to see the inherent injustice and denialism behind compelling trans women to use either the men's changing room or the disabled changing room if they want to visit the swimming baths.
Of course, if a person holds the reactionary, antiscientific, bigoted view that there's actually no such thing as a trans woman
(or trans man....), and that trans women are actually either just cis men LARPing at being women or they are all sexual deviants trying to get into cis women's spaces in order to offend.... then it's easy for that person to come to (what they believe is) the obvious solution: all trans women are men, and therefore they must use the men's changing rooms.
Fortunately though, that person is wrong.