Part of it, IMHO, is the idea that although "some" people understand "some" of it, there's precious little understanding of "all" of it -- so that's scary for people. Even among the so-called "hedge funds"[*] there are very few who trade any significant amount of the broad array of instruments out there. That's still the purview of the small number of global macro funds out there, and it's likely to stay that way for some time. What's required to be a global macro fund is far beyond what most people are willing to do. So those guys get all the attention.
/jordan
[*] The common definition of a hedge fund has shifted quite a bit over the last decade to the point where most of the funds that call themselves hedge funds are really just trading equities and equity derivatives without the "no short" restriction of common mutual funds. Not many of them care about commodities, for a variety of reasons. For instance, most hedge funds don't even use derivatives (except for true hedging) and few use leverage to any significant extent.
The term "hedge fund" was not meant to describe the activities of the manager, but rather the role it played in the investor's overall strategy: you'd give money to one of these guys as a hedge in case something completely unpredicted happened, in sort of the same way that you might sit on a gold position.