It's about damn time.
Point the first: Selective service is bull; it would currently be political suicide to bring up a draft, and will continue to be for the forseeable future. Countless studies have been published on the fact that drafted militaries serve poorly as compared to volunteer militaries. I think we should do away with the requirement for registration entirely. However, if there must be a registration, there should be a registration for both men and women. I just personally think, myself, that the "women should have to register, too!" movement is going the wrong way with the selective service. Nobody should have to register.
Point the second: Women have been competing in sports on the same level as men for a long, long time. As Moraline pointed out, women can train and work out to the point where they can do pretty much anything a man can do. Just as there are men with narrow shoulders and broad shoulders, so too are there women. There are many people with different capabilities out there, it's very true. However, those capabilities have little to do with gender specifically and more to do with muscle mass, dedication, and individual genetics.
Point the third: We have these things called hormonal treatments that do away with the necessity for looking after one's menstrual cycle. They are not that difficult to carry, they are easy to administer, and their health risks are individual. Granted, some individuals react very poorly to hormonal treatments, but that is another thing that has to be addressed on a case by case basis. And, again agreeing with Moraline here, menstruation is not more difficult or less sanitary than many other bodily functions that men have.
However, I'm having a hard time supporting this decision personally. The part of me that's a feminist is all "Fuck yeah, betcher ass!", but the part of me that's more humanitarian is asking why the military is taking this step when there is rampant sexual abuse among its ranks. By the statistics, women are more than twice as likely to face sexual assault while serving their country than they are when in the general population. What is the military doing about that? How are they going to protect our women in uniform whether they are in combat situations or non-combat situations? I feel like there has been a lot of attention on sexual assault and the role of women in the military lately, and a jaded part of me wonders if this move is being made so the military can point to it and say "See? We're not sexist!". Call me skeptical. :/