Why are they infamous? Your mileage may vary. Writers are imaginative people and they come up with all kinds of reasons that they don't like or like something. I've heard/read that the slips are particularly impersonal, that you get them regardless of writing quality and so there's no hinted feedback at all. I've heard/read that the small size makes the writer feel small. The content is very general, and lists some of the reasons why both poor and good manuscripts are rejected--again, giving the author no feel for where their story may be on the scale. And there's a number on them--the average number of manuscripts received in a given period.
Me? I like them. I like the color. I like that it's an efficient size--it fits perfectly inside a legal envelope, no muss, no fuss, no folds to straighten when I file them. I like that my story and the date it was viewed is hand written on the rejection, and that so far, I've never had someone else's rejection come to my mailbox. And I like that they make the editor's job easy. That means she can go through more manuscripts faster. That means quicker responses so I can return my manuscript into the marketplace where it may find a home, and hopefully it's less likely that the editor will burn out.
So, although it was disappointing not to get a fat envelope with a contract in it, I still smiled. Another pretty blue note to add to my collection, and I didn't even have to date or put the title of the story on it before I filed it.