You don't really say so I'll assume this was at 100 yds? Also the picture is a bit hard to read. I'm assuming that on that target those are 1" grid squares. If that was all from the rifle I'd ask what position you were in. Were you standing, sitting, prone, if sitting were you using a rest? Also, what ammo were you shooting? If seated from a rest, to be fair that's not that good. I count 11 squares across so by my earlier assumption, 11". The rifle should group better than that. If standing it's not great either, but much more understandable. I will say don't be afraid to try different manufacturers of ammo. My WASR seems to shoot best with Wolf, certainly better than Red Army Standard or Tul Ammo. Off a rest with a red dot the groups can go from 4 MOA to up to 6 MOA when I switch back and forth. For some reason my particular rifle doesn't like 122 gr RAS ammo, but even within a model each barrel can be its own entity. Other than that, work on your trigger control, develop a stable shooting position, and be sure to find something on the target to get a consistent index to reduce your group sizes.
As for the comments you got, there's this stigma about AKM pattern rifles that they can't be shot well. I've had guys seeing me make adjustments with AK sight tools and ask me if I was joking. What you need to understand about these people, is they aren't experienced shooters. Now I may catch flak for this, but it is my opinion. The 7.62x39 cartridge is not ballistically great and the rifles that shoot that cartridge often leave something to be desired, but the rifles should relatively easily be capable of man sized hits at 100 yds and I can squeak out 2" groups or so at 50 yds with a red dot (no magnification) from my WASR, so about 4 MOA. This is from a rest that leaves something to be desired and a shooter with good but not great trigger control and not very good eyesight, even with glasses. My point is, if I can shoot what I do with the WASR, then others can easily do the same or much better with practice.
Some of these myths are based off of the experience of certain US soldiers in the Middle East, but the marksmanship of a lot of our adversaries over there is downright terrible and many believe that Allah himself will use his will to guide the bullets to their targets, "Inshallah", or "God willing" (Cpt. Ronald Fry a former Green Beret discusses this in his book Hammerhead Six). The rest of the myths come from bad movies and tv. The AKM can perform adequately with a good shooter, as can any rifle really. When you hear people bad mouth it, smile and nod and remember that the knowledge and skill set of lot shooters out there is often exaggerated in their own minds (mine included).
One day.