Competition from the public option must be unfair because government does not need to make a profit and has enormous pricing and negotiating powers.
In so many words, a government-run health insurance option is bad because private companies won't be able to compete with it (without significantly changing the way they operate, at least). This reform will hinder the ability of health insurance providers to make money the way they have been.
This argument is what it is. I can certainly understand the desire of insurance companies and their stakeholders to protect their profits.
However, it must be fairly difficult to mobilize a significant national effort to oppose legislation on the grounds that it will provide better health coverage than private insurers are willing or able to provide. Not many people are going to show up at a town hall meeting to shout down reform proponents with chants of "WE WANT TO PAY MORE AND GET LESS!"
That's where the core Reep strategy comes in.
Rather than argue the plan on its actual basis in reality, they've opted to make up a bunch of horrible-sounding nonsense about it and use that to mobilize their army of what they refer to as wackos. People who wouldn't show up just to support insurance company profits will go to war to oppose, let's say, government-run abortion clinics, mandatory euthanasia for the elderly, rationing of health care services, or any of the other bizarre measures the right-wing propagandists claim are on the way if the bill passes.