What was/is(?) fraudulent about it, from the perspective of a single citizen who invested?
The result is that we now have no idea how much insider trading actually went on in that premine sale. For example, it could be the case that most Ethereum is secretly controlled by a tiny, tightly knit cabal of people who collude to pump up the price to a false valuation. If this were true, it would be incredibly problematic with their planned transition to proof of stake, because a tiny number of people would effectively have full control over the fate of the protocol and all the money outsiders hold in ETH.
I should not have conflated my personal feelings with it with the facts of its suspicious and unverifiable initial distribution.