Freddy was thought to have been a pedophile which was the reason why the townspeople decided they needed to kill/burn him to death and hated him so much. It was never actually found guilty nor was it ever confirmed. This was the entire reason that Freddy came back to hunt their children, to make the parents pay for not taking the law into their hands.
Towards the end of this movie, it flat out said he was a pedophile, which totally kills the entire vindictive side of Freddy. It made him some boogeyman that enjoyed abusing children. Notice that in the original series his victims were all older in their late teens when he would attack them.