In essence, Michael Savage was added to the banned list as a beneficiary of non-affirmative action. The "Britain's Least Wanted" hit parade was felt to be a bit heavy on chaps called Mohammed and Ahmed and whatnot, and the Home Office geniuses decided that it would upset the, ah, "extremists" if there were too many "extremists" on the list. Persona non grata-wise, they felt it was important to celebrate diversity:
'We will want to ensure that the names disclosed reflect the broad range of cases and are not all Islamic extremists.'
Michael Savage is certainly not Islamic, but is he extreme? The civil service felt it was a bit wobbly, but you could make a case:
'The fact that he is homophobic does help.'
Excellent. As John notes, Savage isn't too "homophobic" for San Francisco, from where he does his show.
I'd also add that the point of the Home Office banning him was to look even-handed to "moderate Muslims" — such as Sir Iqbal Sacranie, head of the Muslim Council of Britain, who on the BBC a while back expressed the view that homosexuality was "immoral," "not acceptable," "spreads disease," and "damaged the very foundations of society." But that's not homophobic, just vibrantly multicultural.
I weep for the UK.