It's a bad fit for most of the things I need to do. Especially for systems that have a lot of background processing, but need a web front-end (because enterprise, and dashboards!), it is a drag to have everything go down because IIS has decided to recycle your app pool due to 20 minutes of front-end inactivity. Yes, you can change the settings to disable that, or architect things differently to separate the UI from the background service, but it is extra complexity that is a pain. Building a Windows service that has a light-weight webserver built into it is much easier.

IIS also has too many knobs that can get fiddled and frig things up. Before we switched, I'd always be on support calls to help a customer fix one of our products after their sysadmin tweaked something in a way to break us, or installed some other piece of software that stomped on us.

IIS also has a very conservative set of defaults if you naively install it. Seriously, I've seen a lot of instances where customers install IIS, and CSS doesn't get served - you have to install an additional Static Content module. People don't read instructions, or bother to run required setup scripts. So you have to do a bunch of additional work with less-than-friendly installer authoring programs to make sure that features that any self-respecting web server ought to have out of the box are available.

Completely agree that it's wrong for certain use cases. And it is a complex tool, but I personally like the flexibility.