There was a lot of confusion about the indulgences, their purpose, and how they worked. One of the ways one could do a type of penance was via the giving of alms. This was perfectly legitimate, and there was really nothing wrong with the collected money being used to erect St. Peters. Where the problem came in is the focus on the monetary giving aspect and the glossing over of the penance part of the gift, so much so that there were stories circulating - some scholars dispute them - that this was being portrayed at what one might call “the parish” level as simply buying souls of departed relatives out of purgatory.
Part of this problem resulted from the fact that these various kingdoms and districts were not ALL allowing these indulgences to be sold. So you can imagine the situation today if iPhones were selling on one side of a bridge separating two towns for $299, but across the bridge they were $149. Likewise, people in the districts where these indulgences were not allowed to be sold would flock to the places they were sold, and of course this only magnified the perception that this wasn’t about souls at all, only a giant fund raising effort and no more.
But it was always supposed to be about souls and offering of some form of penance by the living to expedite their time in purgatory. It didn’t help when these were characterized with some kind of colloquial saying along the lines of “a coin goes into the pot and a soul flys up to heaven.” Of course it didn’t work like it, and no serious person with an ounce of faith would ever believe it would. However there were divisive forces at work all around these occurances, and this served as good an opportunity as any to assail the church.
Did the Church do everything right? Probably not, as it could have done more to ensure those going out collecting were doing more to emphasize the correct teaching. But that is also Monday-morning quarterbacking. They didn’t have the internet and cell phones then, and if things went sour it stayed that way for a long time until word got back and action was taken. Were people in the church going overboard with it? Almost certainly they were. But do their actions speak for them, or does it reflect the entire Church’s teaching, policy, and intent? The latter. I think. is a very very hard case to make.