They flipped out at it for just being different and foreign. Nowadays Americans have some exposure on Japanese/Asian food outside of Americanized Chinese food, but until fairly recently they didn't. So something that feels silly to freak out over now like eating seaweed was super controversial then. It was on par with some of the crazier stuff Andrew Zimmern ate on Bizarre Foods.
When you have the tv networks wanting to bring a literally foreign product to America, they wanted to sanitize controversial stuff, and food was one of them. People freaking out over Japanese people eating seaweed? Let's make it a jelly doughnut!
The reason why it feels ridiculous now is because we're looking at it through more modern eyes. Because stuff like sushi is popular, the concept of eating that along with seaweed is no longer controversial. If you look at it through the eyes of what was contemporary at the time, you'll see "OMG RAW FISH AND SEAWEED???? EW YUCK GROSS!!!"
It's like watching a film or TV show that was controversial in like the 1960's, but you're watching it now thinking "so.... what's the big deal?"