Actually, I believe it's exactly that simple.
It annoys me when guys say they suck dick but wouldn't call themselves bi or gay. It's like they've never read a dictionary - that is what those words mean. It's internalised homophobia, plain and simple. Life isn't Waiting for Godot - words have meanings which can't just be discarded when you feel like it, and actions have words to describe them.
There's nothing wrong with labels. It's the social connotations people insist on attaching to them with no reason that are the problem. If people didn't still still think that being gay or bi was a shameful thing, they would have no problem labelling themselves as gay or bi, since those are in fact the factually accurate terms.
You say it is simple, some say it isn't. How can you know another person better than they know themselves. Yeah I know dictionary words have meaning. I also know that dictionary words are generally pretty stern and allow no inbetween or no grey area. Not everything or everyone can be so easily categorized though. Science teachs us that! The dictionary and society say everyone must chose a preference or make a choice. But what if the words they make can't really describe someone? Labels simply can't always stick! Funny how words like "transexual" never seem to really come up. Almost dismissed as if it doesn't or can't exist, as is the word "bi-sexual." But if you can't be one or the other, what are you supposed to be?
I also find the idea that someone "must" come-out as someone ridiculous. I see celebrities coming-out of the woodwork everyday it seems. Not necessarily because they especially want to, but usually they feel forced to. I'll use the recent Greys Anatomy situation as an example. Why must people have to endure this kind of public judgment or scrutiny? Why does it matter so much to everyone else what somebody is or isn't? I seriously don't get it!