You know how parenting advice is always not to label your child with things such as 'bad boy' or 'good girl' (or whatever), and to focus instead on the behaviour that is bad or good? That's because if a child hear's 'bad boy', he then identifies himself with the 'bad boy' and his behaviour gets worse.
I believe the same thing happens with mental health diagnoses. If a disease is given to you like an identity (and it's difficult not to see it as an identity when it relates to aspects of your personality...) then you begin to fulfil that identity.
'You are an anorexic'...for instance. Do you really want to identify with that? Do you want to reframe your idea of yourself in that way? What happens to 'you' when you stop being anorexic? I think there's a bit of an intrinsic mindfuck in the whole thing.
I don't know if it's necessary to do away with all labels - they're a helpful short hand - but perhaps it's more just saying 'you are currently suffering from schizophrenia' rather than 'you are schizophrenic' - because a HUGE number of people suffering from schizophrenia make a FULL recovery. Rather than 'you have generalised anxiety disorder', 'you are currently suffering from generalised anxiety disorder'. Not 'your personality is borderline', but 'you are currently suffering from BPD'. I think it's the permanence of it, personally, that becomes a self-fulfilling prophecy. I believe it should always be viewed as a transient thing so that people don't end up identifying with it. When you have glandular fever - and that can last for years - you don't start to identify with it. You just 'currently' have glandular fever. If they can be recovered from, why start identifying with a label?