I believe him.
The world is full of men who neither call themselves gay, nor view themselves as gay but still have sex with men.
Gay is a cultural term to describe a certain cultural behavior, as in, I'm gay, which means I freely admit to seeking out members of the same sex for love, sex and companionship.
What about men who never admit to anything? What about men who seek out sex with other men only when necessary or convenient, or occasionally?
Is a hetero-identified man who's married to a woman but enjoys the gay baths on Sundays a gay man? Should the frat boys who fuck around with other frat boys until they graduate to marriage and kids be considered homos?

Turns out, a man who sucks dick part time doesn't answer yes to the question, are you gay. Go figure.
So you see, America, former Senator Larry Craig is not gay. He's just another man trying to get his nut with another man, like so many men before and since.