*snore*
Huh? (smacks lips)
I'm someone who has strong opinions on the subject of gender in language, but this argument can never get anywhere. Here are the reasons why:
1. Language evolves. Rather rapidly, in fact. What was acceptable a generation ago isn't acceptable today. One reason that "sexist" words are less acceptable today is simply that people have begun thinking about them more, but the gender-neutrality of English has been an issue at least since Victorian times.
2. When language changes it happens on a word-for-word basis. Either the community at large accepts a new word wholesale (e.g. "blog") or it is quickly forgotten. The same goes for words that shift and expand to meet the needs of their society. In any democratic society, no matter how PC, there is no compelling reason for "prince/princess" to acquire a fully gender-neutral form. The masculine connotation of 'god', however, I think has weakened slightly in recent years.
3. The purpose of language is first and foremost to convey meaning. In some sentences it is better to be gender-neutral, because you want to avoid adding a connotation you don't intend. In other sentences it is better to be gender-specific because it adds *correct* information to the idea. Language is sufficiently flexible to permit both.
In quality writing, one chooses the word that brings the correct connotation as well as the correct meaning. "Goddess", for example, connotes mythology for most native English speakers. When we're writing fantasy, we often deliberately choose old-fashioned words to create an atmosphere of antiquity. Tolkien went so far as to encourage this atmosphere by choosing words with Germanic/Norse roots rather than Greek or Latin whenever possible, and adopting sentence structures which were more common in Middle English.
4. Finally, every word carries all its possible meanings with it, all the time. The context usually makes it clear which one is intended, but you cannot prevent the other meanings from coloring the sentence. This is especially true when the definitions overlap.
For example, consider the following Modern English sentences:
"Space travel is the destiny of mankind."
The context makes it obvious that "humanity" is the intended meaning of "mankind", but the sentence still implies that space travel will always be a male endeavor. To put it another way, it requires conscious effort on the reader's part to interpret this sentence in a perfectly gender-neutral way. If we assume that "humanity" is the writer's intent, then they sacrificed clarity (adding a counterfactual connotation) for a literary/oratory connotation.
(That is, they were probably hoping that their language would remind the reader of other powerful works that used the word "mankind". This is a poor reason!)
"I am not a number! I am a man!"
The speaker means "human", but in this case the additional connotation of "male" adds correct and useful information to the sentence. If the speaker were a woman, she would never use "man". She would have chosen "person", "human being", or "woman" because these words are all fully correct.
(This sentence is exceptionally powerful because the two meanings of "man" are both fully appropriate. If the Prisoner were female then this line probably would not have been memorable. That may seem unfair, but writers have to work with what they're given--there are other strong lines in the show, after all.)
"Zebi is the goddess of Love and War"
Well, why not? In this case, it would leave the reader hanging not to specify a gender if you can. Would you introduce a character in a novel without finding a way to tell the reader whether it is a man or a woman? I think the reader will assume that the author's word choice is supposed to carry that information.
In conclusion, there is nothing sexist about "goddess"--it just conveys additional information which is sometimes useful. The masculine connotation of "god" will probably never go away, given the state of modern religions.
The phrase "the gods", however, nearly always means "the pantheon" just as "mankind" nearly always means "humanity". The connotations, however, are different.
"The gods" connotes masculinity and antiquity.
"The pantheon" connotes academic writing, and may make the prose sound like a lesson.
"The deities" connotes nothing in particular.
The fact is, there is no gender-neutral term that also connotes antiquity. So the authors of the PH are left with a choice. Do they err on the side of flavor, describing the deities in terms that remind the reader of the past? Or do they choose the side of gender-neutrality, at the risk of sounding a little more like a textbook? There is no "correct" choice for an RPG, which is halfway between a textbook and a novel.
In conclusion, it is usually silly to adopt a blanket policy for gendered words. The use of pronouns is a whole 'nother can of worms. All I'll say is that I like the way 3rd edition handled it.