Well, there is a lot I can say here. Be warned this is long and operates at least on a College reading level.
First, it might be best if I explain the difference between Textual arguments and Contextual arguments.
A "text," to give you all a new definition of the word, is anything that signifies. So, the word "text" -in a cultural studies sense- can mean anything from a book to a film, to a game, to a blog and even more. When you make a textual argument, you make an argument based on the shared text, in order to convince others to interpret that text in the same way you do. In a sense, this is a method of using shared signs to create shared signification.
A contextual argument uses facts or opinions which are not directly represented in the text, but to the same end.
So, we have the textual arguments: "Lelei said this to Lucretia." "Aldo dropped this hint here." etc. And we have the contextual arguments: "Millich dresses this way because he is gay." "Tir and Gremio are too close to be just friends." Also, Arguments that "The creator intended this or that" is another type of contextual argument.
First, as an audience, we have the right to interpret texts as we see fit. It is silly to say that the game creators are the only ones who can decide whether or not a character is gay. We all interpret things differently, but from a strictly textual standpoint there is a lot of room for the individual to decide things.
For example, lets flip this question round: "From a strictly textual standpoint, who do we know is heterosexual?" The answer: Very few characters. Ronnie Bell clearly had a daughter, Emily, and this is enough to support that she is a heterosexual. Katsumi clearly has a crush on Tir, and I guess that textually this establishes her as a heterosexual, at least in the time frame we are provided.
But, from this textual standpoint, we see that surprisingly few characters have had their sexuality "confirmed" either way.
Now, let's add Contextual arguments to the mix. At this point, your own interpretation of the text is added to your own ideology and world-view, making your arguments highly subjective, even more highly subjective than any strict textual interpretation. Honestly, I think that this can lead to very interesting discussions, but it also keep in mind that is is difficult to change anyone else's mind, and in the end the argument might be fruitless, if entertaining.
I do agree with Deon and others here though. Millich, for example, was a good character simply because he was well conceived and written, and whatever his sexuality, that ended up being only a small portion of the whole. Millich was defined by his desire to right his past wrongs, which gives his character a moral basis, not a basely sexual one. This unfortunately is too common, to see homosexual characters defined entirely by their sexuality, not by their morals, intellects, or philosophies.
Also, I've always objected to calling characters like Millich "Narcissists." The word is derived from the Greek myth of Narcissus, who fell in love with himself after seeing his own reflection. This does not really sit well with me to sum up their characters. I think a better term might be "Dandy." Which, while it has been used as a slur against gays, also has a legitimate meaning beyond that. Here is a link to the Wiki page: http://en.wikipedia.org/wiki/Dandy
I personally think that would be a better term, even though characters like Augustine and Josephine have some narcissistic tendencies, it is more accurate to call them "dandy" in my opinion.