I can't remember our ever discussing this one before, but it's been cropping up a lot lately on the web and seems nice and juicy. My position is that while I find the bogey man of male predators in women's restrooms scary, I can't see how prohibiting transwomen from using women's restrooms will affect that in any way. These seem to me separate issues.
Anyone doing harassing or abusive things in a public restroom is breaking the law no matter what rationale they used to gain access: they're transwomen, they're cross-dressed males, they're bio-women or they're undisguised men just barging in. Gender, however it's come by, does not give a pass to illegal actions. And male predators are out there breaking the law already, it's not like they're sitting around passively waiting for transgender restroom rights to improve. So making a fuss over transwomen (and that's were all the focus seems to be) isn't making public restrooms safer, it's just harassing transwomen.
Also, most transpeople tend to dress and look like the gender they identify with. I can't see people like Laverne Cox or Buck Angel being able to use the "biologically correct" restroom without a great deal more havoc and trouble than if they just used the restroom suitable to their transgender. As for the idea I've heard some put forward, of making separate trans restrooms available -- way to paint a target on someones back while wasting money and causing inconvenience to building owners at the same time. Again, it seems more like a desire to punish people for not following fundamentalist social rules than a desire to protect women.
The third most common objection is "but women and girls will see penises!" I've been using public restrooms for some 60 yrs, all while living in large, metropolitan cities, and I'm sure I've shared one many times with transwomen and probably also some male cross-dressers. Never, ever have I seen anyone's genitals, male or female. I'll go so far as to say that if you do see someone else's genitals in a women's public restroom it was probably because you were trying really hard to do that, so who's the pervert here?
Here's a blog post from Love, Joy and Feminism that gets into it much better: Conservative Rhetoric and Transgender Bathroom Battles