I’ll defer to input from bdp here. From what I’ve read, at a point in their lives when the other members were struggling financially, Robbie came around and bought their individual rights to The Band’s music "for a pittance" as the expression goes. Kind of the old Jacob stealing Esau’s birthright story in a different form. Though no one forced them to sell, Robbie is seen as taking advantage of them. At least some of the bitterness towards him stems from that. On top of this, I think Levon had his own issues with Robbie over group "ownership and leadership" conflicts.
Robbie did write a lot of The Band lyrics. Seems like he was well read (and gifted)...leastways that is my impression; consequently, lotta grist for the mill. According to Wikipedia, the lyric of Whispering Pines is a case in point. Richard wrote that beautiful music, Robbie contributed lyrics that, to my mind, are a mirror on Richard’s soul and that ain’t no simple parlor trick. There are many, many others too, like the excellent Acadian Driftwood and one of my favorites, below...
I tend to think...maybe more than working with Dylan, it was during their time with Ronnie Hawkins when they really learned their chops (not to take anything away from time with Dylan, of course).
http://theband.hiof.no/history/part_2.html@bdp24 - Like yourself, Levon also expressed great admiration for Richard’s singing (as well as his drumming!). Anyway, this isn’t meant as "one ups manship" at all because, while I love those 2 songs by Richard, for me from a singing/performance point of view, this is the one that always knocks me out. It’s Rick from Live in Japan. Just put this on repeat. What a fantastic song.
https://www.youtube.com/watch?v=uSHzODm-Ik8If you want to turn this into some kind of "The Band for Aficionados", I’m there.
Okay...done (for) now. :-)