No offence if you liked it, but The "Craft" was filled with negative (and completley untrue) images.
For starters, why is it that when Sarah wants to leave, the other three start tormenting her? Real witches would never do this. Wicca doesn't recruit people, it's not a cult. If a witch wants to leave, they can do so anytime they want.
Nancy and Rochelle frequently do things to hurt people. Again, real witches would not do this. The first Wiccan law is 'And harm ye none and do what ye will'. Basically, do not harm others.
At one point, they mention God and 'the devil'. Witches DO NOT believe in 'the devil'.
Nancy is made out to be a slut. REAL witches would not use sexuality in such a degrading, casual way.
I could go on, but I think I've made my point.
Chilled monkey, don't worry--I wasn't offended, nor did I particularly enjoy "The Craft" (except the part where I got to ogle teenage girls in school uniforms for an hour-and-a-half).
As to why Hollywood would EVER portray a person, organization or concept in a negative, inaccurate way, it's because that's exactly what Hollywood does. If the witches had let their friend leave the coven unchallenged, it wouldn't have made for very interesting cinema, nor would it have given the effects department the chance to try out some of 1996's latest SFX gizmos for the climax.
The studio could have, I suppose, run a disclaimer saying that not ALL witches act like this, that many of them are fine, honorable people...but then, they were likely under no direct threat of lawsuits, protests or hexes from the Wicca lobby. It's a lesson to be learned, boys and girls...if you're a rich, powerful Hollywood entity, you have nothing to fear from special interest groups with a solid history of not complaining loudly or effectively.