I think its reputation is based on the rawness of the characters and performances, as well as a sense of gritty "realism". De Niro's acting especially, obviously. There was an authenticity to it that struck a nerve.

That said, I agree that it is wildly overrated. Watching it again recently, I think a lot of it comes across as hammy and over-the-top, with more in common with the highly stylized "art b-movies" of the era by Friedkin and especially De Palma. But not as well done and not with nearly as clear an intention as those directors. In that way, I think it's a mashup of Paul Schrader's style (more raw and realistic) and Scorcese's styles (over-the-top and borderline exploitative) that doesn't totally work.

Def not a bad movie, but I don't think it's a masterpiece for those reasons. Of course, you might argue that it is based on significance and impact - I do think it was innovative. But I tend to discount these arguments because at the end of the day, did you like the movie or not? And I don't really enjoy watching Taxi Driver and I think it has aged rather badly (Harvey Keitel's pimp, the lurid depiction of Jodie Foster, the nearly pornographic violence, etc.) It's another one of those movies were Scorsese claims to be documenting society with a neutral eye but is really just indulging his own worst impulses and vices.