Yes, it's mediocre and not very memorable (which is why I don't remember whether I skimmed or fully read it), and yes it has hints of Abrahamic memes, but that's hardly a big deal after to choosing a very religiously loaded word (Demons) in the first place (which happened long before Infernals). The rageful reactions seems disproportional to me. Why does it burn so strongly?
This is actually pretty easy to explain: Lillun.
More expansively: Exalted is a game/setting that tried not to pull punches about it's subject matter. It was a fairly pragmatic, realistic view of things People Did to People. We had an entire book (Manacle and Coin) written about slavery in Creation and the drug trade, couched in largely objective terms. It relied on the players to understand that it was a factual dissection and allusion to
real world practices that they could use in their game.
Also economy and such was Geoff C. Grabowksi's baby, so a lot of his love for the subject of money and trade made it into the book.
As for Lillun- she is the Phylactery-Womb, the device which holds the Infernal Exaltations between incarnations. She is- objectively- horribly written. Her entire existence is based on shock value and lack of understanding of nuance and the core themes of Exalted.
Chapters 1 and 2 of MoEP Infernals were written without oversight or communication, based on guidelines that resulted in "All the Yozis
will have sex with their new Infernals" and eternal-child-exalted-vessel.
The criticism here, is that this is schlock, obnoxious and plain
bad writing. There's no nuance or anything to grab the player- it's depravity for the sake of depravity, and
that is badly handled. CoCD: Underworld had a similar problem, where the writers misinterpreted 'Underworld' as 'place of punishment'.
To that end, there is a ghost-run brothel where male rapists (and only male rapists) are taken in,
emasculated, reshaped into beautiful women, and then their genitals are forged into soulsteel chains that force them to feel and act out whatever emotion their client wants.
I don't know about you, but I don't find that cool, edgy or evocative. I find it painfully overwrought. There are a number of ways that could have been handled, and ideally, they would have been handled
much more maturely.
Basically- Exalted has across its entire existence not merely as an edition thing- a hit/miss approach to Maturity. Sometimes it's a 13-year old's grasp of the concept, other times it's the insight of a university graduate.
I do understand and approve of creating interesting inspirational settings and elements to spark the imaginations of players and storytellers. I also understand the value of giving something people can
rage against- because the horrible things in Exalted exist for players to
take a stand against.
I'm kinda relieved about
@Shyft mentioning the "This is broken, and you're wrong for having fun with something that is obviously broken" attitude-impression issue (because this means I'm not being delusional, at least not completely), but I also feel that this applies no less, and probably more, to the setting than to the system.
If the system is so bad and the setting is so bad, but the ideas are so good, then why not take the ideas and make a different setting and pick a different system?
The system has issues. The setting is perfectly stable in wide angle. The core elements of the Primordial War, the Exalted, and the state of Creation in the 2nd age are all pretty much unilaterally accepted. It's the specific nuances that get trotted out from book A over book B.
To answer your question about new settings though, I point at why people so thoroughly bought into into 3rd edition:
In the first case, it was
novel. People were able to engage with the system and set aside the burden of
years of insight into 2nd edition. Exalted 2e is a 'Solved' game. as Revlid pointed out, we often take houserules or interpretations as self-evident. 3e allowed people to toss that out the window.
That, psychologically, is a
huge burden released from a person's mind.
The second case, is that it was an
official product. Arguments and debates about Exalted usually revolve around Accuracy and Canon- with some holdouts to specific houserule and fan projects. (see Kerisgame).
Let's take Terrifying Argent Witches as an example: Because it was not an official product, there is a psychological slant
against it because you can't point to it as an Authority. It's credibility is only rooted in its own functionality and quality. An
official product by named authors ? That's
legitimate, and it becomes an authority to appeal to.
So, back to your question: Why do we stick with Exalted?
Because Exalted is already 90% done for us. I know that whenever I try to make a new game and setting, I have to actively
avert making it like Exalted, because I so thoroughly enjoy that setting, that I cannot help but include elements from it or learned by it.
That 10%, or 20, 30, 50% - Whatever it is for an individual or person, the rest of it is
good, and instead of trying to make something whole cloth, it's simply easier and more fun to use Exalted and
fix it than it is to make the new setting.
That's my take at least.