It was a very good album. I probably would have given it 4 mics instead of 4.5, but I agree that it is unfairly hated on.
I think it is underrated because there was a great amount of hype leading up to its release --- far too much hype for it to live up to expectations.
The cause of the hype: Nas hadn't released an album for almost three years and fans were very eager to get some new material from him. Moreover, the build-up was all about how it would be a "return to form" for Nas after he went from Nasty Nas to Nas Escobar with It Was Written. Everyone was waiting to see if he could take it back to Illmatic form. When "Nas Is Like" came out a few months before the album's release, it looked like there was a real chance that I Am would be Illmatic part 2, and the hype got even BIGGER.
When I Am finally came out, it didn't live up to the hype (naturally), so there was disappointment. What made it worse was the bootleg that had been floating around before the official release. Everyone could single out a few songs from the bootleg that they thought should have made the final cut, so it just created this "glass half empty" view of the official album.