The issue is actually with the Suspension of Disbelief.
A old saying goes like this: "You can believe in time-travel, you can believe in dragons, but time-traveling dragons is stretching it."
Basically, one can suspend their disbelief of space fighters and FTL warships. But for some people, a gaint robot set in a realistic setting just spoils it. This has to do with two things. One, the techical issues, which I already adressed. Two, the cultural differences.
When Gundam came out, Japan had decades of exposure to robots in their media. The Japanese had no problem in beliving in Real Gaint Robots. In America, this isn't the case. Hard core SF fans have difficultly believing in mecha.
