Intersex traits cover a fairly broad range of things, and there's a reasonable argument that up to 1.7% of people are intersex. Visibly atypical genitals are fairly rare (1 in 1500 births or so), on the other hand, but don't cover the entire range of intersex traits.
Complicated, but simplest explanation is from wikipedia:
In biological terms, sex may be determined by a number of factors present at birth, including:
the number and type of sex chromosomes;
the type of gonads—ovaries or testicles;
the sex hormones;
the internal reproductive anatomy (such as the uterus in females); and
the external genitalia.
People whose characteristics are not either all typically male or all typically female at birth are intersex.
Sure, but what are the rates for things like that? And in the case of different chromosomes, what are the variations that still result in a fertile and "normal" human being?
My concern is that people are attempting to use the existence of intersex folks (at widely varying claimed incidence rates) to make faulty arguments about what is and is not normal physiology.
The criticisms are more about terminology than the core argument though - they mostly argue that "intersex" should only cover a small number of conditions that result in an arbitrarily substantial differentiation from a "normal" male or female, rather than any significant differentiation. So if the question is about sexual dimorphism, those criticisms are mostly irrelevant.
But here's a question: why is it important that they can reproduce? Gay men and women are unlikely to reproduce either, so should we ignore them in policy-making too? Are gay people abnormal?