I have been accused of homophobia a lot. Although I am not, I bet it exists. I bet there is truly someone who is terrified of homosexuality. I oppose its openness, its marriage, and its natural routes (i.E. I think its not natural), I do NOT think that it would be accurate to say that there isn't someone afraid of it. I am not 'afraid' of it, so personally, I am not a homophobe--but to say it doesn't exist is foolish.
Now, I do think by the popular definition (anti-gay 'rights') a lot of people fit the definition.
Homophobia is more often used not to refer to an actual irrational fear of homosexual people, but rather the opposition of homosexuality, hate of homosexual people, and just negative attitudes toward the subject, i.e. an anti-gay bias.
Arguments usually go nowhere because anti-gay people get so caught up in the fact that they aren't homophobic because they aren't afraid of gay people! They just hate them! While it would be nice to have a word to replace "homophobic," it's more important to understand what the person using the word actually means, rather than policing their word choice.