Cyberpunk 2077 was released on PC, Stadia, PlayStation 4 and Xbox One.
It performs quite poorly on the base PlayStation 4 and Xbox One, and basically to get a good console experience, you need a PlayStation 5 or an Xbox Series, where you'd play the game in backwards-compatible mode (there's no PlayStation 5 / Xbox Series versions yet).
CD Projekt Red never showed any footage shot on the consoles and didn't send out any review codes out for the console versions before release. All of the reviews that came out before the release were for the PC version and even the PC version wasn't allowed to show any recorded footage in their videos (only the publisher-provided B-roll).
The game is also quite buggy and unfinished as well, on every platform. Many were also disappointed by the actual game. There's for example some talk about the AI, which is rather subpar.
Combine the poor performance on the consoles it came out on, the deliberate attempt at hiding the true state of the console versions, the multitude of bugs and glitches and some of the lackluster aspects of the game, and you'll find yourself with a lot of upset people.
As to why Sony is giving refunds, I'm guessing it's because CD Projekt Red made a statement promising big patches for console versions next year. However, in the same statement, they said that people who didn't want to wait could "opt for a refund" and should contact Microsoft and Sony for digital refunds.
However, we later learned that there was not agreement between CDPR and Microsoft/Sony, and they were just talking about the standard store refund policies. In Sony's case, you can't get a refund if you've already downloaded the game. This lead to a lot of people being angry at Sony for not getting the refund they were "promised". On Microsoft's side, people were getting mixed, but slightly better results.
Seems like Sony decided to go with the nuclear option after getting bombarded with refund requests after CDPR's statement about refunds.
