Diesels are dirty, but I'm doubtful that is where the aversion comes from. Americans are fine with diesel trucks, and, at the time period that the MB diesels are from, emissions wasn't nearly as much of a focus as it is now.

I've heard that one of the supposed reasons for an aversion to diesel sedans specifically is that, during the fuel shortages in the 70's, GM hurriedly built diesel sedans that turned out to be poorly engineered and extremely problematic, and that debacle convinced the public that diesel sedans were a bad idea.