ignisferroque: I wondered that too, the only game i played relatively short after release was Pillars of Eternity but i didn't have major bugs with any of their games. But they said themselves in interviews that their QA was subpar so i guess i was just too late for the party ;)
I think it’s a well-earned reputation compounded by the fact that they make RPGs, one of the most difficult genres to test/fix. Fallout: New Vegas was seriously unstable, Alpha Protocol has a multitude of bugs, and Knights of the Old Republic 2 isn't even finished.
And yet… they offer games so engaging that the bugs barely slow me down. Their writing cannot be matched, and their characters have more depth than anything I've seen in gaming. Alpha Protocol is just wonderful, especially when you get out of the first locale and start making your own network of contacts.
Lately Obsidian have been doing very well for themselves. South Park was great, and Pillars of Eternity was remarkably polished for an RPG, let alone an Obsidian game. Their reputation in the industry has never been better!