I think that there was a certain amount of hysteria, irrationality, fear of the unknown, and complete misunderstanding of what was going on - Jack Chick is sufficient evidence of that.
I don't think its fair to bundle all the parents, pastors, and the like who got caught up in the scare with that label.
When D&D first showed up, it was a very 'fringe' behavior. It was associated with anti-social groups, Satanists, mysogyny, drug use and so forth not by wild overreach, but because there were alot of groups for which that characterization fit perfectly well. At the time, I did know groups that played D&D and smoked pot during sessions, or which played D&D and who were avowedly Satanists. I think that Jack Chick and the like helped reinforce the sterotype, in as much as by advertising D&D as fringe behavior it only helped recruit more fringe groups and tilt young peoples assumptions toward D&D as part of a entire lifestyle of anti-social behavior and rebellion, but I don't think that the then sterotype of the '70's D&D player as a pot smoking hippy Satanist is wholly without a basis in fact. Heck, the whole bearded grognard image of older players we retain of that time, is also the image of a person who is permenently stuck in late 1960's early 1970's college culture and if you talk to those players a great many of them will readily admit that in that era D&D, drug use, and/or what you might call 'experimental religion' (of some sort) interweaved.
And it's worth noting that the 1e D&D game books did nothing to help dispell this initial notion. Umbran says, wisely, that a parents approach should be, "Son, let me see those books, please. I want to read through them and understand." However, supposing the average parent did do that, and you handed them OD&D pamplets, or AD&D DMG's or MM's and they started reading them it's wholly unreasonable to assume that anyone would get what the game was about from a rules dump like that. Nothing in the MM told you how to play the game. The DMG was confusing and difficult to read even if you did know how to play the game. What the average person and particularly parent would have noticed first would have been half-naked females, demonic imagery, and half-naked female demonic imagery. I am obviously an RPG supporter, but I don't blame anyone for picking up the 1st edition DMG cold and taking away from it that it had something to do with soft core porn and demons. It would have required a rather large amount of tolerance and patience to come to understand the game on its own terms. My own parents had absolutely no problem with D&D and stayed out of the contriversy until I started brining the 1e AD&D books home instead of the basic/expert D&D books. Convincing them that the imagery in the book wasn't actually what the game was about and wasn't actually a core and essential feature of play was not easy, because after all, why would you illustrate it if it wasn't?
The problem defenders of the hobby had was that the narrative about the hobby was superficially believable. If you were on the inside, you could see how ridiculous many of its claims were, but from the outside if you were raising your kid, claims that this 'new thing' was related to drugs, Satanism, anti-social behavior, and all sorts of 'bad influences' were entirely believable even upon inspection. Either an inspection would turn up groups that fit the description of 'bad influences', or else would turn up mystifying rule books filled with pictures you didn't associate with what you wanted for your 12 year old.
I get very skeptical of anything which it is convienent to believe. I find that when people don't actually understand something, they immediately try to explain things by ascribing ignorance and stupidity (or evil or insanity) to everyone but themselves. I'm certain that I do that from time to time. But while you seldom go wrong betting on the ignorance and stupidity of the human race, generally speaking you are better off including yourself in that assessment because the real story is usually alot more complicated than, "I'm smart and you are not."