The grammar of the demonstrative pronoun
houtos cannot tell us how to translate it into English. As has been noted, the only reason
houtos is masculine is because its antecedent, logos, happens to be masculine grammatically.
It most commonly means "this." If it modifies another noun and its article, it means "this [noun]"--this box, this man, this sandal, etc. It if appears alone, it can mean "this man" or "this one." But, several times this demonstrative aspect of the pronoun is weakened, so in effect it functions as just a personal pronoun and is translated "he."
A few posts in this thread, however, have demonstrated the ultimate point: the way one chooses to translate this pronoun in
John 1.2 is based on the interpreter's prior understanding of Jesus Christ that he brings with him to this passage. In other words, if you're a Trinitarian, you'll definitely assert that it should be translated as "he," because it refers to a person. If you're Oneness, you'll say it shouldn't be "he." I don't remember the exact wording used, but at least a couple of people in this thread, I believe, have said in effect, "Since the Word is not a person the pronoun shouldn't be translated 'he.'" So, their pre-understanding is guiding the translation.