They is a good example of how language shifts over time. It's now acceptable to use they as singular.
...and that we don't still use "thee" and "thou".
I actually made a point of using ‘they’ as an inclusive singular pronoun in my own RPG. Much easier than alternating he/she or the like.
Weirdly, some places still do. My dad grew up in a Derbyshire mining village and the dialect there uses "thee" and "tha" (thou) in a way that has its own consistent grammar. It's common in Derbyshire, Nottinghamshire and Yorkshire, with pronunciation differences.
"What's tha doin'?" - what are you doing?
"Ah tha goin' t' see thee mother? - are you going to see your mother?
"'Tha's got no meat on thee!" - you're quite thin.
It's like a different language, especially since there are a lot of words that aren't used in generic British English. "Mardy" and "nesh" are adjectives that I particularly like to confuse outsiders with.
I don't mind it used like this since the player can easily be one person or a group. I'm just not a big fan of using they if you're only talking about one person and there's no possibility of there being more than one person. Just seems weird to me. Oh, well.
Urgh, now it looks like I made up a grammatically incorrect title. :/
Thanks! That's better. 
This bit of the old thread got off topic like woah, and onto a topic that I think is super interesting :)
One of the fascinating and powerful things about English is that, unlike French, or German, or many other languages, there is no governing body that decides what is and is not correct English; rather, the language evolves naturally through usage. It lets the language grow, and has helped it become the most spoken language on the planet, but it can also be disconcerting for people who preferred grammar the old way. Thus, while I vastly prefer traditional, "proper" usage of things like fewer/less and the subjunctive, I fully understand that the current colloquial usage has become just as "correct" as the traditional usage.
The pronoun shifts of English are a topic of particular fascination. I definitely understand someone in 2014 saying that "They is plural and unnatural to use when talking about one singular entity", but by 2114 I suspect that few will think that usage unreasonable. A quite similar shift has happened in the past with the second person pronoun, as Greywind alluded; in 1514, it would have been quite understandable* for someone to say "You is plural and unnatural to use when talking about one singular entity", but by now, most English speakers will think you are weird if you use "thee" and "thou" (except for Silverleaf's relatives :) ), and in any case won't realize that those words are the "correct" singlular second person pronouns.
*Actually, it wouldn't have been understandable in the sense of "modernly intelligible when heard spoken" due to the incomplete state of the Great Vowel Shift in 1514.
How words change and evolve is a fascinating topic. I do a lot of "find-all-the-things" style research (Librarian), and a big part of that is figuring out if (and how) the language has changed over the years so that I can find everything on a given topic. Even over five or ten years, you can see multiple iterations of a word to describe a specific concept ("reassess" becomes "reassign" becomes "exit"), or you can see times where there was a massive shift away from a word ("Mental retardation" is replaced with "disability" when talking about education, and is further broken up into types of disability) as the understanding eveolves about what that concept actually IS.
EDIT: admittedly, this is not about pronouns. But it is still fascinating, and I hope the diversion will be forgiven.
Paul, you have given me a lot to wiki over the next few days.
Only if you're fluent in the dialect, with the right accent. Otherwise you sound like you're taking the mickey or too pretentious to exist. 
I'm slightly ashamed of this, but I trained myself out of my natural North Derbyshire accent, use of regional slang, etc and cultivated a generic hard-to-place somewhere-in-the-north-Midlands-probably accent instead. I hate the way people judge you based on your accent - people immediately assumed I was rough, common and unintelligent before they'd even got to know me a little bit. I hate that.
Show them your intelligence by pronouncing Z correctly! That'd shut 'em up.
"You talk kinda funny, Nash. Where you from?"
"Lots of different places."
Zed?
ha. That's not just an English phenomenon. Growing up I moved around a lot through Latin America because of my dad's job. Every time we moved to a new country I had to adjust to new slang and a new accent and I got made fun of a lot because I spoke "weird Spanish" wherever I went. So I got very good at paying attention to the way people spoke to me and then suppressing my own speech pattern and mimicking theirs whenever I met new peiple. It got to the point where I would do it subconsciously even while not trying to. I still do it to this day whenever I meet Spanish speaking people. And now I get made fun of for that, hahaha.
I have enough relatives in Tennessee & North Carolina that y'all is a natural part of my vocabulary. I will still occasionally have students razz me about it. (Note, incidentally, that my spelling above is the proper one. It is most definitively NOT ya'll.)
I'm from Texas, and I grew up in east texas, so I can speak with a pretty significant drawl if I want to; it also tends to come out as I drink. Like some others have said, I've mostly worked it out of my normal speech pattern to avoid the judgements mentioned, but I steadfastly hold on to "y'all". It's just a piece of my heritage that I refuse to let go of.
Thee thy and thou are still in common usage in the US, but only for New England Quakers. They don't use them as fancy terms, but as familiar terms used mostly for children, and mostly when misbehaving. It's closer to the original informal/familiar meanings of the words, but it can be jarring for modern folk who've only ever heard them in a formal religious context.
Also, y'all is perfectly legitimate. It gets the job done with fewer syllables than any alternative, and it only sounds silly if you overload the drawl for it.
Just one point about singular "they": It has actually been in use for a very long time (back to the King James Bible):
Then shalt thou bring forth that man or that woman, which have committed that wicked thing, unto thy gates, even that man or that woman, and shalt stone them with stones, till they die.
The older usage is a little restricted: If I understand correctly, it can only refer to an indefinite person, and couldn't have a specific referent (especially not a named one). That restriction is the one that is relaxing. It's fun to browse old Language Log posts on this subject:
It is impossible for an Englishman to open his mouth without making some other Englishman hate or despise him.
- Pygmalion by George Bernard Shaw