We see all factions in Fallout New Vegas at their best and worst. The NCR's corruption and beauracracy, the "Visionary" House being betrayed by an underling, we see it first-hand. The Legion has the most fans because we see them at their morally-worst, not their operationally worst.

We're introduced to Caesar's Legion right after they efficiently conquer and crucify a town, then we learn that they did it to assholes and the town's mayor helped sell his people out.

Sure, you can call the Legion out on destroying towns they'd be better off taking tribute from, but only when you, the player, is talking down Legate Lanius. I don't think any NPC actually notices how bad the Legion's scare tactics are for its logistics.