You are correct, he IS on to something, but to be fair, alot of nutritional types are on to something, and that is, that high amounts of refined carbohydrates are probably bad for you. The problem with Atkins is that he dogmatically sticks with is idea that carbs are evil (well, ok, thats not true, but alot of those who go on his diet totally eschew carbs altogether), and that saturated fats aren't bad for you in the absence of carbs. Thats probably not true.
What people should take from his diet is the idea of reducing processed carbs from ones diet. I wouldn't go as far as the Atkins people do (although I must say that I have tried variations of the diet, and it has worked very well for me).
Also, for some people (apparently, different people process their foods differently.. gee, what a concept), its a great diet (Synrome X types). Those who say that its a bad and dangerous diet should probably refrain from making blanket statements about such things.