Actually, I don’t think they’re gay in particular, just a bunch of drunks having a good time.
Santa Con sometimes used to meet in Greenwich Village in NYC, and as far as I could see the main idea was to party hard.
I didn’t see it around here last year.
BTW whenever I see a whole bunch of (provocatively) “dressed up” people on public transit (read: BART) I know they’re headed off to some parade/festival in San Francisco.