People object to Dubai because the rise of the city was never based on any real economic activity. There was no real tourism, no manufacturing, little resource industry, nor a knowledge economy. It was all hype - in the same way that we frown and look down upon the unrealistic, borderline scammy dotcoms of yesteryear, we look on Dubai with some disdain for what we perceive as dishonest business.
I may disagree with the politics of, say, China, but one cannot deny that their economic rise to power was based on real growth, in real industries, providing tangible benefit to people.
Secondly, the objection to Dubai (and the schadenfreude you often see at its downfall) is fueled by the notion that much of Dubai's construction and service industry was built on indentured labor, if not borderline slavery; the labor abuses in Dubai during its hey-day would make a 19th century robber baron blush. Hell, if the reports are anywhere near accurate, labor conditions in Dubai makes a Chinese sweatshop a veritable paradise.
So, in short, the perception (whether or not reality jives with this will be answered by history) is that: Dubai was built on hype, no real substance, fueled by shallow people, upon gross human rights abuses.
It is far from as simple as making bad business decisions.