All truth belongs to the Catholic faith, regardless of who said it. If Ghandi said that the sky is blue, that would still be true. Likewise, if he said that we should hate the sin but love the sinner, this doesn't necessarily make it wrong. That said, it is true that many people (purposely or not) misconstrue or oversimplify this phrase. I did some searching and apparently the phrase was originally coined by St. Augustine in the context of a letter to some nuns concerning the merciful attitude that believers should have when the Church rebukes and corrects another believer’s sinful behavior:
When convicted of the fault, it is her duty to submit to the corrective discipline which may be appointed by the prioress or the prior. If she refuse to submit to this, and does not go away from you of her own accord, let her be expelled from your society. For this is not done cruelly but mercifully, to protect very many from perishing through infection of the plague with which one has been stricken. Moreover, what I have now said in regard to abstaining from wanton looks should be carefully observed, with due love for the persons and hatred of the sin, in observing, forbidding, reporting, proving, and punishing of all other faults (St. Augustine’s Letter 211 written in a.D. 434).
I think that the problem is that people today do not under stand love or judging.
Keep in mind that when it comes to statements that are "too vague to be useful and for the most part used by
some to excuse behavior offensive to the Lord", this could equally be applied to words of Scripture, given how people apply "judge not lest ye be judged". Now is that the fault of Scripture or of people? I'd say of people. It's still a valid verse/quote, as is the "love the sinner, hate the sin", in my view.