At its best, it often means "technical, business experienced, just transitioned into intensive software study", which is an enticing candidate. At its worst, it means something like "paid $50k to learn basic Javascript". Lumping those two together makes it really hard to draw any conclusions about experience.
* Other players in the space will likely make the industry look bad
* If you graduate the wrong people they can paint your company in a negative light
By and large, companies that get a bad university applicant who can't build a web app don't let it paint their experience of universities as a whole. But if the same applicant was from a bootcamp suddenly all bootcamps are terrible sources of any serious talent and they'll never be considered if they're in the applicant pool.
This exact thing happened in the late 1990s with Visual Basic/HTML schools. A bunch of unaccredited for-profit courses issuing certificates and promising jobs sprang up during the dot-com boom and were fairly popular. Everyone I had heard about that attended these things left the industry during the crash. I do not see any difference in the way the "bootcamps" are run or what they promise (the word "bootcamp" is new, though), and I think the outcome will be the same.
Without that, there's too much fear that you'll get someone who doesn't understand code reviews, writes unmaintainable horrors, or is generally inculcated into the write-once, read-never pattern of class assignments.