I think there are two perceived issues with the red cabs that cause dislike:
- Although their power may be dwindling, the songthaew mafia has always had a strong political influence. Apparently there are more than 5000 songthaew drivers in Chiang Mai, which together with dependent family members is a lot of votes! They have actively campaigned against public transport improvements e.g. buses, have monopolised the "meter taxis" so they don't use the meter and prevent motorcycle taxis from operating. There are therefore a lot of people who don't like the way they carry on. Some changes, like the buses perhaps have only happened because the current powers in Bangkok don't like the "red" side of Chiang Mai.
- The behaviour of some in their driving methods, blocking traffic, fare gouging and general demeanour (especially assaulting Uber drivers) gives them all a bad name. Not to mention the pollution problem with older vehicles, many of which are driving around empty.
That said they do have their place, if you can find one, which is not so easy in some residential districts as ceejay alluded to. I often use them on regular routes e.g. from Maya to Kad Suan Kaew it's a no brainer. Even after the price increase to 30Bt I've never been asked for more then 20Bt. Or going further afield on main routes, e.g. Kad Suan Kaew to Thapae Gate or NBZ, pay your 30 Bt and you're good. Only downside is if they have other passengers the route may not be direct. If they ask for more than 30Bt on a main route say no and get the next one.