Oppenheimer was a beloved figure to many in the physics community, both for his work as a physics researcher and mentor, but also because he for many symbolized the contributions that erudite intellectuals could make to large-scale American policy. His work as Scientific Director of the Manhattan Project was credited by many for the success in developing the atomic bomb, and his advocacy in the postwar was always as someone who believed that physicists had a special capability to contribute to the future direction of national policy (both military and diplomatic), and while he did frequently work with the military, he never acted as if he worked for the military (at least not in the postwar). So he represented a particular vision of how scientists could fit into a new, postwar order: as independent advisors with high moral consciences who were regarded as being more than just the producers of weapons and technical jargon.

By people who saw him in this light, his hearing was a tragic work of McCarthyist slander. They saw it as basically punishing him for a reasoned policy position he took (and not just him — quite a lot of scientists and administrators took the same position) on the hydrogen bomb. The farce of it, in their mind, was that most of the hearings were about his political opinions in the 1930s, "stale" accusations of Communism that ultimately were not very compelling (and were totally known to the Manhattan Project and AEC security officials prior to Oppenheimer working for them).

So there were two really negative associations here. One was punishing someone who had already given a huge chunk of his life to public service, because some of the positions he took were opposed by others. The other was the idea that you had to have this spotless record to make a contribution to public science — the McCarthyist angle — and that without that, you would be constantly under threat of denunciation. So the Oppenheimer hearing was ultimately seen as a betrayal and a threat. It was a way of saying, well, thanks for winning the war, but from now on, if you're not a total military-booster and weapon-making like Edward Teller or John Von Neumann, your services will not be required. This contributed to an increased alienation of scientists from the goals of the US government, and ultimately would feed into nascent stirrings (which would be made really active by the Vietnam War) about a reaccounting of the "social responsibility of the scientist."

Now there are many ways in which this "perception" of it was not quite accurate (Oppenheimer, for example, was in many ways complicit in the same processes, and threw his own students under the bus for their political positions several times), but this is how it was largely understood by those sympathetic to Oppenheimer's political positions. Those who were more conservative and hawkish (the Teller-Lawrence-Strauss side of things) read the whole thing as confirming that Oppenheimer, the individual, was very idiosyncratic, unreliable, and the kind of person who would lie to security agents (all of which is true). They fully expected that once the transcripts were published, it would be clear that it hadn't been a "witch hunt" in any way. And there is something to be said for that position, as well, though they were totally wrong in how it would be understood publicly.

I've written on the hearings a bit, if you are interested in some more analysis. Bird and Sherwin (both of whom I know and whose book I like) are very sympathetic to Oppenheimer's political positions for the most part (at least in contrast to those of his accusers, like Teller, Lawrence, and Strauss), and so they take a fairly sympathetic read to him, even while they go into much of his dirty laundry.