I expect another heated discussion, so flame suit on ...
Rather than go on why we crossdress, I wonder why does society have such fear of this?
Some possible reasons:
Fear of homosexuality
Anger at deception
A SO's competitive nature
So food for thought on these - a woman is not lesbian, but having a partner who presents as female makes them feel that way, and they are uncomfortable thinking about being a lesbian in their mind or the mind of others. A man who sees another man who is presenting as female and pretty, rather than just admire the person is sexually attracted to the person, but since it is a man, then does that make him gay in his mind, and so upset at that fear? All seem reasonable, assuming that homosexuality is something that people are right to be fearful of.
Anger at deception - you present one way (female) but are really male - "you are deceiving me and that is what I don't like " or "I married a man - you don't look like the person I married, so you deceived me!" But both sexes will focus on their appearance and body image more during dating, and things often change after marriage, so is that deception? Women put on makeup routinely - is that deception? You may say it is a matter of the degree of deception, but I wonder about the underlying cause, not the degree.
Competitive - does the SO feel competition for her love and attention from this 'other woman' in the relationship? Despite the male partner showing her love and attention, she can see how happy this makes him, and feels competition due to that?
I am not saying I am right or wrong - feel free to expound your point of view or add other possible reasons. Add facts if possible. Just one collection of thoughts as to why we are in the closet.
Hugs, Ellen