'he' was already genderless. 'She' was introduced to signify female, and 'he' become masculine by comparison. Perhaps in introducing 'she' we should have introduced something like 'ghe' for male, then we could keep 'he' as undefined, and everyone would be happy.
That's not quite what it says. It says that there was a time (1200 years ago, in a different language) when he existed with heo, which was female; and then heo morphed to he; and then she was introduced. It doesn't specify whether he was originally masculine or ambiguous.
'he' was already genderless. 'She' was introduced to signify female, and 'he' become masculine by comparison. Perhaps in introducing 'she' we should have introduced something like 'ghe' for male, then we could keep 'he' as undefined, and everyone would be happy.