But do they? That is kind of the point. Do they look bad? Do they even care if they look bad? What do they have to lose now if they do look a little bad? So you are well respected, but the average user doesn't know that so the SEs don't care.
Corporations do things all the time that "make them look bad" and unless it makes them look really bad, it doesn't stop them. Search engines are corporations. If they can replace your very well respected site with a dozen respected sites, have they really lost any ground in the public's eye? Think Wal-Mart.