Among coffee drinkers instant coffee is generally considered as a last resort and many avoid it entirely, even though instant coffee is often cheaper per cup and doesn't require specialized coffee brewing equipment.
Being someone who was involved in the manufacturing process, instant coffee is made with the cheapest possible grains, always. Doesn't matter if you think Nestlé is good they do choose the cheapest way to produce, I am not sure if this is the case everywhere in the world, this is coming from Argentina, but I'm pretty certain it is the case.
What you get in cheaper coffee per mug you loose in quality, and if you aren't drinking coffee just for the caffeine then you will want the good taste and smell.
Because the taste and aroma are horrible. I've been places (for instance Shanghai and Beijing) where it's hard to get a cup of coffee outside of business areas catering to foreigners.
The instant coffee is terrible. It is not a pleasure to drink. It's only palatable (to me) with a ton of evaporated milk and a lot of sugar. For someone who usually drinks coffee black this ruins the coffee experience.
To answer your question: for people who love the smell and taste of good, freshly roasted, freshly ground coffee - instant coffee simply doesn't compare. Hence the poor reputation.
Instant coffee suffers from a number of drawbacks that put it on the far end of the spectrum from well raised and processed, properly roasted and freshly ground coffee. To start with, instant coffee is usually made from the cheapest and lowest quality beans. These beans are then (usually) roasted and brewed on large industrial equipment. The coffee is then dehydrated into a powder. While dehydrating food and beverages is great for long term storage and portability, it generally doesn't improve (or even maintain) the flavor of the food and drink being freeze dried.
Basically the market/prices for most instant coffee dictate that it will be produced with the lowest possible costs. Meaning marginal beans are sourced and put through a bunch of horrific processing to make a marginal product. Add that to the fact that it's only "easier" in a very limited amount of circumstances and one can understand it's limited popularity. While it may be less time intensive than the process one goes through to brew their own coffee, it is actually more time/labor intensive than stopping at a drive through coffee shack or grabbing a cup from a communal pot at work, which is how many people source their coffee.
While there may be a few companies out there striving to produce high quality instant coffee, the majority is not of high quality and the truth of it's "not that much easier" existence means that overall it suffers from low reputation.
Apparently some instant coffee varieties include parts of the plants including stems, bits of leaves, etc.
Source: 2006 documentary Black Gold (IMDB page).
Instant coffee is usually made with robusta beans instead of Arabica beans. Not only are these beans less flavourful and aromatic, but making the coffee beforehand generally allows all of the delicate aromas and notes to escape over time (this is why robusta is used in the first place). There is a reason beans are best ground just before being used.