In general, our society is still very transphobic. There's elements of it that lingers in the LGBT community, because all to often people don't want to remember the T part. Video games are no different. More often then not, it reflects the gender normativity of our society that often portrays androgynous or abigious people negatively. I can't claim to know much about the transgendered experience, but I try my best to understand their posistion. (And don't get me wrong. I love the RE series yo. But I can love them and critique them at the same time.)
In Resident Evil Code: Veronica and Resident Evil Dead Aim, transgendered people are portrayed as in the stereotype of being obsessive (which is why they changed their gender), vain, and untrustworthy. Alfred for RE CV is the obsessive part. He's crazy and obsessed with becoming what he's not (his sister). The idea that transgendered people are what they are "not" has been used to justify the vilification of them. Morpheus is also an obsessive who transform into a female like creature in order to obtain beauty, which is another stereotype of transgendered people (that they are always trying to be beautiful). Sometimes, transgender chose to change their sex because they are trying to become what they truly believe they should be. They're not doing it to become what they are not, because to them they are that way.