Since this thread appears to be full on rampant cluelessness, I feel it's my duty as an MPEG expert and long-term member of this forum to put aside some of these myths.
Why might he have said divx sucks?
There are a number of reasons, depending on what he was referring to. He could have been referring to the old Circuit City divx rental model. That probably sucks, but since it's dead, it is irrelevant whether it sucked or not.
Or he could be referring to one of the two (2) MPEG-4 Video for Windows codecs that go by the name "DivX". That's right, only two. The first is "DivX 3.11a ;-) " (yes, the smiley is part of the name) and is a hack of Microsoft's MPEG-4 V3 version 4.x codec. The second is by DivXNetworks, Inc. and is fully legitimate and is known as the "DivX codec" (source of major confusion) and is currently at version 4.12.
The two have nothing to do with each other. The first was written by Microsoft, but a number of bytes in the DLL was modified (by a hacker named Gej) so that it could be used in general purpose AVI editing programs.
The second was written from scratch by a group of programmers looking to "cash in". They knew that the old DivX 3.11a codec would never be commercialized and was doomed to a life of pirate DVD transcodes, so they started a corporation, wrote a codec from scratch and began to tout it as the best thing since sliced bread. They eventually reverse-engineered the DivX 3.11a playback DLL enough so they could add DivX3 playback capabilities to the Divx4 codec, and to make it seem like the Divx4 codec was a logical progression from the Divx3 codec.
The problem, though, is that it isn't. There are a number of deficiencies with DivX 4.12 that are common to all codecs based on ISO MPEG-4 code. You will notice that MPEG-2 (DVD, SVCD, etc.) does not suffer from those deficiencies. Also, what is considered most "evil" about anything that comes out of DivXNetwork's labs is the fact that they "cashed in" and "sold out" the divx enthusiast scene. They apparently have added (or will be adding) some sort of content-control to the codec, similar to what is in WMA files. For this reason, many enthusiasts think it "sucks".
Also, the quality of a well-done Divx3.11a file compared to a Divx4.12 file is not much different. If you are very familiar with Divx3 tools, then the Divx3 file will look better. If you are a newbie, the Divx4 file will probably look better...
Of course, this is just a technical look at the two Divx codecs, and why a fan of Divx3.11a would say "DivX sucks" referring to DivX4.
Compared to SVCD or DVD, divx (both of them) can "suck" because they are not playable on standalones currently. And even if standalones gain that functionality in the future, they will likely only be able to play ISO standard MPEG-4 files, and not a DivX .avi file that has been burned onto a CD using the Microsoft Joliet CDFS filesystem.