He's scary because there is to some degree, the Uncanny Valley effect to him, among other theories that can be applied to him.
He resembles a human until you see the tentacles, by that point, it becomes disturbing because Humans don't have tentacles, and your mind knows that.
It's all based on comfort zones. We are supposed to be mindful of Police Officers, but if you were a young kid and you saw Robert Patrick with Knife-Hands dressed as a cop, that would aim to be uncomfortable to you to some degree, because police are good people, and the T-1000 is not.
I think the same thing can be applied to Slender Man, in that the suit is comforting to some extent (I don't see Giraffes or Chickens Wearing Suits/Tuxedos) because it is appropriately human. However, there is also no face, so he can't be considered a Villain (I have heard that bad guys are more dislikable if they have eyes you can see two of/Have faces), but as a sort of Lovecraftian Horror character, there are no eyes, so its a force you fear, not fight.
Does any of this make any sense?
As for Obsession, It's because it hasn't been sold to death Via Hot Topic products or anything else. The moment a movie ends up being made, Slender Man will have been too much.