1) He's a popular character. Even though he's pretty well balanced, people generally don't like seeing the same character over and over and over, and they'll often assume the reason so many people choose to play him is he's overpowered or something- even though that isn't the case.
2) He destroys jumpers. I mean, people shouldn't be jumping as much as they do online, but the lack of decent AA in the game almost makes it a shock to the system when you go against GL and find it's easier than ever to get grabbed out of the air.
3) His combos are long. His damage is scaled so they don't add up to too much even on his biggest ones, but dam. Once your caught in Lantern's Might, might as well put down the controller, go make a cup of coffee, catch up on the news, then return to the game once the combo is almost over. Even in game's I've won against Lanterns, I'm pretty sure the majority of it was spent with me being helplessly tossed around after a Lantern's Might connects....