The word "hacker" has a long and honourable tradition of referring to a
certain category of skilled computer programmer.  For example, see Eric
Raymond's "How To Become A Hacker" at
http://www.tuxedo.org/~esr/faqs/hacker-howto.html

Some people who break into computers definitely *are* hackers: they discover
interesting security flaws through enthusiastic exploration of technical
information and artifacts, combined with skilled computer programming.
Many people here would quite reasonably call them hackers, while lamenting
their choice of focus.

However, most people who compromise computer systems are not "hackers" in
this sense.  Numerically speaking, these days most people who break into
computers use canned "exploit" programs or otherwise follow procedures
formulated by others.  So many people, on this newsgroup and elsewhere,
try to observe a distinction between the terms "cracking" and "hacking".
"Hacking" is not typically destructive, and its basic outlook is responsible
for the creation of a lot of the computer software we all use, whereas
"cracking" involves breaking or compromising something.  Also see
http://www.interhack.net/hacker.html

Other people say they're just words, and for better or for worse, the
media has conflated them in almost all people's minds, so let's give up.
I personally disagree with that view; and in particular I think that for
people who stray across the borderline between acceptable and unacceptable
system "exploration", it is helpful and can turn them into productive
citizens and maybe even keep them out of jail to discuss the difference
between hacking and cracking.

All these are the reasons that some people get upset when system penetration
is called "hacking".  And some people don't.