I don't think praising a bad politician is automatically a bad thing, as long as you're clear and accurate in your praise.
In my book, one could even get away with praising Hitler for building the Autobahns or praising Nixon for pulling us out of Vietnam, notwithstanding what monsters the men were. So certainly there are things for which one could justly praise Reagan. Specifically, I think it's right to praise his optimism and his energy and his charisma, which I think were good things for this country. I think this country did need a shot of confidence and enthusiasm, at the time, and he provided it.
I also have been known to praise him for having rejected the advice of the neocons, when it came to the Soviet Union, and instead pursuing a policy of increasing gestures of goodwill and negotiation. I also praise him for pushing forward with talks to control the nuclear arms race. I think it's also fair to praise Reagan for having kept us out of any major military conflicts for eight long years, which is something not too many American presidents have accomplished. He may have been a terrible president, overall, a deeply immoral human being, and the leader of a breathtakingly unethical administration, but he did have virtues, and they can be praised specifically.
So where I fault Obama is not in the fact that he found words of praise for Reagan. It's that his praise was ridiculous. For example, he claimed Reagan was a more transformative figure than Clinton, which is clearly wrong. The Reagan era was more of the same when it came to the problems that had been mounting for America for decades (more deficit spending, more high unemployment, failure to make significant progress against poverty, near-stagnation of incomes, deep recession, overblown peacetime military spending, and escalating social problems like teen pregnancy and crime.) There was no great transformation to speak of. We just fell deeper into the same old rut.
The Clinton era, by comparison, was dramatically transformative, in the way it reversed so many negative trends that had been so long established that most people hadn't expected them to change in our lifetimes. As of 1992, how many commentators thought we'd soon be running budget surpluses? How many thought we'd soon have plummeting poverty and sky-rocketing median incomes? How many thought the crime and teen pregnancy epidemics were about to go through an unprecdented era of improvement? How many thought that the growth cycle would last for ten years -- longer than any growth cycle in history?
Obama was being dishonest. He was offering up the tired old disinformation that the conservatives had turned into conventional wisdom, about Reagan being a transformative figure and about him returning accountability to government (which is a particularly bad joke, given that the Reagan era was one of unprecedented bloat in government, especially in terms of military-industry welfare). And he was contrasting Reagan with Clinton in a dishonest way for the specific purpose of taking a dig at his opponent, while playing for "Reagan Democrats."
THAT'S why I object to what Obama said, while I'm much more lenient about the more accurate and less cynical Reagan praise offered up by the Clintons. Praise Reagan for his genuine virtues, and I'll give you a free pass. Praise him for the fairy tales conservatives have invented about him, and I'll take you to task.