In an article in EducationGuadrian by Jessica Shepherd and Sue Learner, 'What a gay day' describe the effect of teaching about 'gender issues'. Elly Barnes, a music teacher at the school in question, said "We have also changed the language used in the school. I used to hear the word 'gay' being used all the time, as a derogatory term. Now we hardly hear that."
I was telling my partner about the article but she had never heard 'gay' being used to mean to refer to something that was broken or useless, such as 'this blog is gay'. I think when I was doing U211 last year a fellow student had heard someone (her son?) describe a pen as 'gay' because it no longer worked. That started a discussion on the the derogatory slang we had both heard growing up in the east-end of Glasgow, and particularly the word 'bent'.
It seemed obvious that 'bent' was in contradistinction to 'straight', a word that the BBC website used today in Why Would A Straight Couple Want A Civil Partnership? and that 'bent' and 'straight' referred to sexual positions in such a way that in the heterosexual missionary position the man is 'straight' whilst in homosexual sex the 'bent' man, or the 'bender', is the one who 'assumes the receptive position for anal intercourse' as the OED puts it, (Draft Addition, 2007, n.). i suppose that that would mean that a lesbian wasn't necessarily 'bent', although the OED records that 'gay' has historically been applied to men and women (adj. 4d) though predominantly the former.
It was pointed out to me, however, that 'bent' has further connotations. 'Bent' can also mean, according to Tony Thorne's Dictionary of Contemporary Slang, 'crooked' in the phrase ' a bent copper' with the concomitant slang of 'going straight'; and (of course) to be a crook is to be crooked. If one considers a screwdriver to be of any use as a screwdriver it would need to be straight but if it were 'bent' or crooked (I apologise for the continuing phallic theme) one might go so far as to describe it as useless. In that context we can see how 'gay' might, linguistically, be related to useless or rubbish.
Additionally, one of the arguments I remember hearing about the uselessness of gay sex was its inability to produce children. This again might explain the present-day use of 'gay' as useless.