That is because people did not really know what they're talking about. Te media, especially the english media kept using Barcelona for click bait and the fans, mostly rival fans didn't even bother to find out what was really going on, they just ran with whatever agenda they wanted.
Same thing with the Manchester City case right now. Rival fans have notread the charges to see if they even made sense. Some don't even care if its true, they just want Manchester City to be punished.
Barcelona was in debt, so is every other club. Check all the big clubs in Europe, you'll see that every single one of them is in at least 300 million debt. Most are in a debt worth 500 million.
Barcelona's main problem is not that they were not generating money, but they could spend only a quarter of the money they made a year. I believe you've heard the "1:4" saying. That's what it means.
Most of Barcelona's problems where they couldn't register players were because of the restrictions of La liga. Every season, La liga publishes the salary cap of each club and due to the debt of Barcelona, their salary cap was too low. So even if they made a billion every day, they couldn't have a total salary that's above the number La liga has given to them. That was why they relied on free transfers and had to release a lot their players and reduce the salaries of their players.