I've followed Moore for some time and am very familiar with the techniques he uses in his films. (Sean Hannity has become quite a student as well) -- However, I don't see propaganda as a bad word because it's all around us in our lives and to call all propaganda 'bad' would be intellectually dishonest.
When an attorney makes a closing argument, he will leave out facts and evidence that do not support his case or version of the events and highlight those that do. That is was propaganda is--a call to action from a particular point of view. I think Moore, like Rush or Hannity or Rush, is mostly preaching to the choir--getting them to 'sing' louder.
The way he uses humor and irony in his work gets his foes riled up--politicians have big egos and no one likes to be made to look foolish.
BTW--I'm wondering, do folks on the far-right see Sacha Baron Cohen the same way? His work is similar in some ways, though Borat and the upcoming film are not true documentaries because many scenes are staged -- or cut together with non-staged scenes to look like a documentary.