In the context of this conversation, you all know that gender and sex do not necessarily equate, right?
So, while it is impossible to discuss biological sexual assignment (male, female, hermaphroditism and asexual organisms), it is a far different and arguably far more complicated matter to discuss human sexuality and try to break down the differences between sex and gender.
So, should sex be discussed in school? Well, beyond John Oliver's once again outstanding take on the nation's generally poor and generally poorly delivered sexual education, it's pretty clear it should. We force immunization because of the effect a sick person has on others. STDs and teen pregnancies affect society, too.
Should we discuss gender, though? That's a much harder question and outside of a specific sociology or human sexuality or perhaps a module on human biology, I wouldn't. And that's because gender specifically isn't about sex (as in reproduction) and it's complicated and, frankly, the language to fully communicate even gender status isn't developed. So, a biological boy can identify as a girl, but that doesn't inherently mean anything else. That girl may like boys, girls, both or neither and have no attractions at all. And that can either be pretty straight-forward or awfully confusing depending on the circumstances. One example is the question of non-binary pronouns. If a biological boy identifies as a girl, we have a language problem and the current options are horrendous. No ones going to learn 50 different pronouns. But that's just one example.
In order to properly discuss a topic in school, a curriculum needs to be developed. For that to happen, there needs to be some kind of empirical standard upon which to build that. Without a common language, that can't happen. Not yet.
That's not to say that the subject should be verboten. Rather, until standards can be put into place, the subject of gender should just be handled with respect and diligence.
So in that respect, though he may not agree with me, I partially agree with Husker at least for now.
With respect to the OP and Target, I think too little credit is given to the pressures to conform by peers and parents. We all know or have met parents who wouldn't let their boys near a pink toy for anything nor would they let their girls near anything that wasn't frilly or pink. There are plenty of parents (male and female) who would love to assign gender roles and have us all stick to them and so see nothing wrong with gender biased stuff like that. Target changing sends a message that overtly gender oriented toys may not sell as well because the store isn't any longer set up to foster that gender gap.
Hopefully, this leads to better toys for all kids.