For instance, if someone called NYC "Whatever, USA": you would probably think them ignorant as even if you've never been to the city, you likely know at least some of the things that give the city its unique identity.
For the people who know and love their precious hometown, to sit by and watch while it is stripped of its identity and rebranded as "Whatever" must be a tough pill to swallow even if it is only temporary and brings in revenue.
The other obvious issue is that the contract was undertaken unilaterally by the town government in secret. For the mayor to take on a contract that affects all residents in such a major way as road closures for street painting, and shutting down the town for a multi-day rager without consulting the people seems incredibly careless, especially considering that there's no real way to hide such an event.
Projects like this can at least be introduced to the community in the town hall for discussion before obligating the town to a contract to avoid secrecy as generally (at least in terms of governmental operations): if you have to hide what you're doing, it's likely something you shouldn't be doing.
For now, many of the people of the town have to deal with an event they didn't want for money that will be spent on a "yet-to-be-determined capital project" that will likely be decided on in the same unilateral fashion as the town was decided to be prostituted for a party by someone who was okay with labeling the town "Whatever" in secret.
From my understanding, people generally elect officials to represent and hold true to the town's identity and increase the welfare of the people of the community, not rebrand it as "Whatever, USA" and annoy the people of the town because it makes some money for a potential future project.
With the actions of the town officials, I would say the residents are rightly pissed. Money is not the only measure of utility.