Why is Broken Window Fallacy thing such a big issue? It's not as if anyone has called for wanton destruction to stimulate the economy, after all. Even destruction that a lot of people genuinely support on its own merits - like killing Nazis - isn't something we go around looking for for macroeconomic purposes. So what's the argument over?
And that is important even if these examples are mostly abstract.
Unfortunately, a lot of people would rather argue that "according to standard Keynesian theory, if all vestiges of civilization were destroyed, this would be a good thing" or "Krugman is a big fan of war" or "Krugman said Japan was going to see good economic times" or that "In Krugman’s version of Orwell’s Newspeak, destruction creates wealth, and war, though not ideal, is morally acceptable because it produces economic growth." And considerably nastier and dumber stuff than that.
How can one respond to this? First you point out the obvious - you don't think those things. But you can't entirely agree with these people on the impact of destruction either because you don't think crowding out holds right now. So to be fair and honest and forthright you've gotta make that still-important, controversial point.
And then when you do that the cycle of stupidity keeps turning. Some Austro-libertarian types do get it. But unfortunately these guys seem to be in the minority and aren't making a dent in the people that say we don't understand opportunity cost or that we actually want destruction.
4 hours ago