The pronoun 'he' used generically, as well as a lot of words including "man-kind" or generic "man" are sex-biased and are not acceptable. However, not so long ago, they were the proper used terms for describing the general. For example, "Man must adjust to his environment." or "He that loves must forgive." etc. Was this always the case or did there use to be a difference in terms between male and female?
I'll paste you two passages about usage of "mankind" and "man" from my NOAD. It seems you were right, usage has changed for "politically correct" reasons:
USAGE of "man"
Traditionally, the word man has been used to refer not only to adult males but also to human beings in general, regardless of sex. There is a historical explanation for this: in Old English, the principal sense of man was ‘a human being,’ and the words wer and wif were used to refer specifically to ‘a male person’ and ‘a female person,’ respectively. Subsequently, man replaced wer as the normal term for ‘a male person,’ but at the same time the older sense ‘a human being’ remained in use.
In the second half of the 20th century, the generic use of man to refer to ‘human beings in general’ (reptiles were here long before man appeared on the earth) became problematic;
the use is now often regarded as sexist or old-fashioned.In some contexts, terms such as the human race or humankind may be used instead of man or mankind. However, in other cases, particularly in compound forms, alternatives have not yet become established: there are no standard accepted alternatives for manpower or the verb man, for example.
USAGE of suffix -man
Traditionally, the form -man was combined with other words to create a term denoting an occupation or role, as in fireman, layman, chairman, and mailman. As the role of women in society has changed, with the result that women are now more likely to be in roles previously held exclusively by men, many of these terms ending in -man have been challenged as sexist and out of date. As a result, there has been a gradual shift away from -man compounds except where referring to a specific male person.
Gender-neutral terms such as firefighter and mail carrier are widely accepted alternatives. And new terms such as chairperson, layperson, and spokesperson, which only a few decades ago seemed odd or awkward, are common today.
The generic pronoun he wasn't always generic. It was actually the result of skilled political lobbying in the nineteenth century. In 1850, the British Parliament passed the Interpretation Act 1850, also called Lord Brougham's Act, which made the pronoun he universal to include both male and female. The reasoning behind this was apparently due to the usage of the word man.
Man has always meant humans in general, ever since it evolved from the German word mannaz.
He hasn't always been generic. Man has.
However, in view of the women in this world, we must not leave them out. This has come under scrutiny in the late 20th century, and now women are being included in everything, hence the inappropriateness of using he as a generic term. Instead of he, they is used instead to avoid sexist language.
Also, the Interpretation Act 1850 has been superseded by the Interpretation Act 1978 out of deference for women.