Bradley Manning wants to become a female

I know it's horrible, but my mum said he would be very popular in prison if he identifies as a female.

I'm confused about this quote though:

His defense team argued that the 25-year-old former Army intelligence analyst suffered from gender-identity issues that were largely ignored by commanders who should have removed him from the position in Iraq, where he had access to classified U.S. documents.

Why would gender-identity issues have anything to do with his performance in the army? and why should he have been removed? are they saying he should have been removed from his position because of it? or am I reading this wrong? (likely). If it is saying what I think it's saying, why is his DEFENSE saying it?

I was unsure of whether to call him "him" or "her" in this case, but I suppose he is still legally a man.