I dont think anyone has a problem with Lebron donating money to charity. More money to needy kids, the better. That said, it can be argued that he used this "charitable act" to justify a display of selfishness and ego that the league hasn't seen in who knows how long.
There are a million ways that a man of Lebron's stature could have raised that much money, or more, for a charity (or he could have just given it to them from his own bank account). The fact that he (in some people's opinion) used a group of needy kids to justify boosting his own ego is why those people get upset. This isn't a David Robinson, Dikimbe Mutumbo, Manute Bol, or any of the other players that constantly raise and donate money for the needy without asking for anything in return. This is a person who added charity as a side benefit to an event he orchestrated to be all about himself. Money for charity is better than no money, but there are far better and classier ways to do it.