Its a combination of not taking wooden items, including things like soap (lye from ash), clear glass items (also made from trees), and objects held in wooden bins (have to meticulously select all 30 stone amulets... *sigh*) with not bringing much worth trading (wooden stuff, a little food, clothing, animals). They never use wagons, so their supply is limited to boot. Then there was that diplomat that prevented you from having a metal industry if you lacked coal combined with general "arrogant elves" stereotype.... Oh! And in DF elves are the only race that actively eats their kills. Upon pillaging a town THE ELVES WILL EAT THE BODIES OF THE DEAD CIVILIANS. They will also have horrific executions like burying people alive and feeding children to animals. No joke, just look closely at what happens in legends mode. All of this combined lead the community to brand elves as "dirty, backwards HIPPIES" that we mock to this day.
However, if you settled in a wood-poor region and/or need to use charcoal for fuel, the elves rock. They bring extra wooden items like barrels, crutches, splints, boxes, cages, etc that you can cheaply buy without diverting coal from the forges (while bringing logs you CAN put in the furnace or make into beds). You can buy seeds for aboveground crops you might want to grow, like bladeweed. Surface crops can be grown year round, so I tend to prefer surface textiles/dye so that I can grow the two alongside each other year round. More food diversity never hurts, either. The pièce de résistance, though, is that they are masters at taming animals and can settle in savage lands. Fully domesticated giant tigers can be delivered to your fortress for less than a thousand DB iirc. Giant. WAR. Tiger. Breeding. Program. I shouldn't have to say anything else.
So yes, the elves are useful additions to the game. If all the races acted the same and all the merchants brought the exact same goods, things would be stale. However, poking fun at elves is par of the community (along with savage brutality and stupidity in the name of efficiency, magma EVERYTHING, etc). Its just a little in joke... I never seize from caravans of any race nor open fire on tavern visitors to loot their clothes/books/instruments... and I'll gladly accept elven petitions. Unlike humans, they wear the default dwarven clothes/armor so I don't have to hit "d" and filter out their clothing piece by piece >.>