LINQ is just another tool in the toolbox. Like any tool it has the potential for misuse. Ultimately the skill of the person wielding the tool will decide whether the outcome is good or bad. It sounds like you've mostly seen the bad. In the right hands, LINQ can make things more readable and concise.

Take another example, anonymous functions in Javascript. I've seen plenty of tremendously horrible JS code bases that were just a deep series of nested anonymous functions. Almost impossible to debug or maintain. However, when used appropriately the anonymous function is very powerful and can make certain things much easier.