It definitely seems like a better acronym. Keeping it LGBTQI... will just lead to another, previously unaccounted for, group going "Hey! What about me!" and causing a commotion, because they'll feel out of place in the community. It would be like if the USA was "The United States of Alabama Alaska... "; each time you ratify a new state, you would have to go through the process of changing the whole name and getting people to recognize it as the "official" name.
Also, to include all identities under that naming system would just be silly, because you'd end up having a 26+ character name to make sure that every person in it is accounted for. By making a blanket term, a group could say "We're GSM", just like a person from New York says "We're from the USA." It's just a better system, because it makes sure there isn't a group that is not accounted for.