I think AT is so misunderstood due to a combination of lack of exposure/ignorance, envy, and the culture of immediate gratification.
1) Lack of exposure /ignorance: As Steve Pastor so eloquently pointed out, there is very little exposure to the greater public. There is simply a very small smattering of tango in the media, and most of it just captures the superficial images of Tango selected to show off the poses for highest impact. If you tried to capture all the deep nuances of Tango, it would not hold interest of the greater public. Remember that the entertainment culture caters to short attentions spans. Tango, by its very nature is a long term commitment to study, elegance and the pursuit of beauty of connection and perfection.
2) Envy: Argentine Tango, when executed as it should, is so beautiful regardless of style (e.g. Salon, milonguero, apillado, nuevo, etc.). People want to look this good. Observers want to look this good. So, it attracts attention, favorably and otherwise. It is a highly sought after commodity. Then, outsiders who are accomplished dancers in their owns style try to do it, and find it challenging. Combine this with the above previously stated factors, lead to ASSumptions about the dance that are just downright wrong (e.g. The comments by the judges on SYTYCD; The choreography thst is shown here)
3) Culture of immediate gratification: I think this one is a BIG factor that leads to misunderstanding. As previously stated by Steve P, AT is one of the, if not THE most complicated partner dances. It takes A LONG TIME to be good at tango. I have lost count of the number of people who came from (and are and very proficient in) other dance forms, dabble in AT, then after a few months dissappear from the milongas and retreat to their previous forms in frustration. Not one of them will admit that they couldn't hack it, so to save face... Just because they were proficient in their other forms doesn't mean you can pick tango up just as easily. Proficiency and elegance in Tango is earned. There are no shortcuts to it, and there are a lot of pitfalls along the way. Tango takes an investment in time, and effort. You really must want to do this.
In our culture of instant gratification, this commitment hardly bodes well. The misunderstanding is generated and then by frustration and by (1) & (2)...