Arc solves the problem of making programs smaller, I agree. I'm not merely admitting that: that's exactly the thing that's impressed me about Arc 0 in the first place. But the problem with programming languages is that they aren't single-purpose honed tools: they're more like a swiss army knife, or a house that the programmer has to live in, or an operating system for the programmer's thoughts, if you will. What a programming language has in common with all of the above is that it has to solve very many problems at once: in order to be considered an unequivocal advancement, it has to solve _all sorts_ of problems at least as well as languages people are already using. Arc currently solves only one problem, albeit very well, and solutions to all of the other problems (copious libraries, that profiler thing you mentioned in one of your essays, abundant and welcoming documentation - all stuff you've identified as necessary for a successful programming language in your own essays, in fact) are being delayed until a later release, an unspecified date in the future.
Taking the analogy to a house, Arc is like a half finished construction project. The frame is up, they're still putting insulation in, and there's one finished room with a cot, a table, and a hot plate which Paul Graham is using to cook the news.yc software. Sure, you might attract scads of interior decorators by opening your house up to random strangers, but very few programmers will be willing to come over to live in Arc. They'll stay in their own houses which are already well stocked with comfortable furniture, decorations, etc., even if it is all a little cluttered and you have to go through the kitchen in order to reach the library from the bedroom.
Some of the people speaking out against Arc are genuine trolls, but some are just saying in a non-tactful way that they'd prefer to stay in a house with drywall, thank you very much.