I thought that the uproar about horse armor was that it was the first pay-to-win DLC. The armor was not just cosmetic but actually provided a stat boost to your horse. The accusation was that the developers had made it too easy for enemies to kill your horse and decided to patch the game to fix it but made players pay for the patch.
It was the beginning of the end, because they saw how much money they made on the horse armour vs how much effort it took to make it. It was actually generally criticized at the time, but it also sold really well.