The reason for the nickname is mostly due to the awful picture of Half Dome that appears on these. Zoomed in, off-color, and off-center. But also, these labels are of a much thinner quality so the color of the disk shows through the label giving it a "dirty" look. (I thought it might be the glue coming up from the bottom, but it's not.) Also, they're not smooth and glossy like the normal Sierra labels, except on the picture of Half Dome.
At first, I thought these were bootleg copies but it turns out that they're way too common for that to be the case, and appear too randomly within sets of disks.
The most I have found is in my Sierra Value Pack where most of Manhunter 2 and all of Hoyle's Book Of Games are on the Ugly Mountain labels. Here is a sample of the Ugly versions compared to the Nice versions we're used to seeing:
UGLY:

NICE:

UGLY:

NICE:

So anyone have any ideas about these? Were they a printing mistake that cost too much money so they decided to use them anyway (as with the EcoQuest hintbooks)? Were these done on purpose to distinguish "regular" copies from "value packs"? Or are they actually bootlegs indeed?
This should get the conversation going!

-Tom.