Boys Don't Cry/WMG

John and Tom (Brandon's murderers, and the antagonists of the film) lashed out due to their own repressed homosexuality.
At least in the film, there is some crazy Ho Yay between them - and John DEFINITELY had a thing for Brandon before his biological sex was revealed. They compensate for their sexuality by bashing gays and ignoring their underlying urges - and then here comes strangely pretty Brandon, inadvertently confronting them with it. That kind of thing could have made them very, very angry... Who was Brandon Teena really? Opinions varies. The movie favors the perspective that Brandon was a heterosexual (Transgender) man, but this view is in dispute.

Brandon was a heterosexual (transsexual) man
This is the view used by the movie, preferred by transsexual activists, and most likely the view that Brandon himself would he have lived.

Brandon was a butch lesbian woman
A view held by some feminists.

Brandon was a woman, confused about her sexuality and gender identity
A view strongly disliked by some transsexuals and homosexuals, along with some people sympathetic to either or both groups.
 * considering that is nearly always the case with women who pretend to be men, that's pretty spot on. Though it still overlaps greatly with the above "butch lesbian" part.

This movie was made in order to send transsexuals over the Despair Event Horizon
That it was Oscar Bait was just a bonus.