Ashreinu: I agree with you completely. I think part of the problem is that some people try to out-Frum everyone else, as if it’s some kind of contest. The wacko stuff that often results makes somewhat of a farce of the term.
Another issue is that too many people believe Frum means an external thing, like dressing the part, (I’m not speaking of a Tznius issue) as opposed to acting the part.