No, the 4L60e is NOT a really bad transmission. They made bazzilions of them and they are reliable. For a fast, high-powered, lightweight car it is okay. For a medium truck/SUV like S10/Blazer it is okay. Just that seemingly some (not all) don't like to be behind the heavy-a$$ full-sized trucks/SUVs. Heavy footed drivers, high-performance mods, heavy towing, donuts, etc....usually don't play well.
More importantly, it cannot hold the power of the 4L80e, stock-for-stock and dollar-for-dollar. You know what I mean? I mean, that's why they made the 4L80e in the first place!
If I was in the business of rebuilding transmissions (and not messing with vehicle modifications) I would advise the client to rebuild his transmission. That's what shops are set up to do, rebuild them. They are not setup to mess with tunes, repining ECUs and all of that other non-sense. Rebuilding the existing transmission makes more money, so why would they advice against it? Order some heavier duty parts of common known failure points from a catalogue/website, add the extra cost to the customer for the upgrade and ship it...on to the next one. From a business standpoint, this works. I don't think that's a bad thing either. Nor is that implying that they don't look out for their customer.
Just my $0.02