Well, there are several issues.
1. Picard was always more of a diplomat who tried to talk his way out of situations and only resorted to force as a very last resort. Maybe that was the intention in the films, but if so then it was poorly executed.
2. There are already TWO characters on the Enterprise who fit the "action hero" model better than Picard, Riker and Worf. If Nemesis had been written competently, then instead of Picard going to duel Shinzon for some vague "I need to do it myself" reason, it should have been Worf. You know, the experienced Klingon warrior who loves to fight and is perfectly willing to die in battle if necessary.
3. Seeing a 60+ year old man with a artificial heart doing Rambo-style action scenes just didn't look right, especially with Riker and Worf around.
4. It just wasn't as interesting as his portrayal in the TV show.
5. They essentially turned him into Kirk, when he was specifically designed to be different from Kirk.