Peoples don't object to Pilgrims because Pilgrimage is a Industry in itself too. Saudi Arabia earns a lot of money because of that and so does people of Kashmir and Pakistan.
Actually the crux of the problem was this only ........ Amarnath yatra is conducted fom two places ... Pahalgam and from Baltal side. Now most of the yatris travel from Pahalgam side as that is the yatra route ..... that place has hotels and other facilites .. owned by the local kashmiri businessmen.
However the route from Baltal is becoming popular as it is a shorter route for yatra .... can be done in a day as against 3-4 days from Pahalgam. But there are no facilities from this area. So the shrine board wanted to set up facilites at this route.
That was going to hit a lot of business people ....... rest you can understand.