His poor reputation comes mainly from his failure during the 1870 war.
He was not as bad as his reputation but he still was a poor leader.
He was intelligent and his ideas were really modern for his time but he proved unable to maintain an efficient foreign policy and his method of government was a pity.
He promoted the principle of nationalities in europe, something which permitted to italy to be unified and that fuelled nationalism in different groups in central and eastern europe.
But he was unable to manage this situation due to a very personal leadership, to many contradictions into his political doctrine and to his lack of backup : he worked alone, he did not inform clearly the other political leaders of his intentions, he did not manage efficiently his diplomatic tools, he changed his mind often upon very sensitive subjects ...
In the end he appeared as a factor of instability in europe and could not maintain the alliances he would have needed to achieve his aims.
The 1870 war showed that his army was led by incompetents generals, that the officer's corps was corrupted beyond reason and that a successful military career was due to sycophant(?) skills rather than to military skills.
This war was an attempt to regain a form of legitimacy and his miserable capture at sedan was the finale push that qualified him for the junks of history.