I think it exists at the crossroads of a bunch of converging trends at the perfect moment in time for it to get screwed.
People are fed up with that art style.
People want more quasi-realistic action cartoons, which is a better fit for Thundercats than wacky cartoon style.
People have just enough affection for the Thundercats that this seems like a betrayal.
The designs themselves are boring and ugly, leaving aside their origins.
The dialogue makes Lion-o seem like, not just an idiot, but a boring idiot.
The creators idiotic Zippy-the-Pin-Head hairstyle.
Out of all of those, I think his stupid haircut had more to do with harming the reception of the show than anything else. People took one look at him and said, "Look at this asshole!" Combined with the wobbly, simplistic style of the show, he basically confirmed all their prejudices.