Why do they say that fats are terrible yet when we removed them from our diets obesity and diabetes rates skyrocketed?

Fats have been given a bad rep. You need fats to function.

Im not sure when you mean, about when fats were cut out BUT if you just cut fats from your diet you will likely replace them with carbs. Carbs being sugars if over consumed can cause diabetes. Also if you were told that fats made you fat and not carbs then likely everyone ate too many carbs and that made them fat.

I eat avocados and butter every day (fats) and have no issue. If you eat over the calories you spend each day you will gain weight, does not matter if the calories come from carbs, fats or proteins.

are you a lobbyist for the fat industry ? 

"They" learn more about nutrition and how it affects the body, all the time. At one time it was thought that fats in foods were all bad. Over time, experts learned that not all fats are the same and some are not only beneficial, but necessary. 

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It wasn't that long ago it was thought that eating eggs increased ones bad cholesterol. That was learned to be untrue, and now eggs are considered safe to eat daily. As time goes on and more studies and research is done, more is learned about how specific foods and specific macro/micronutrients affect the body.

When did the great fat removal happen? I think what you meant is that we now print nutritional information on products and tax a few of them.

People don't read them, get fat, and wonder why they have diabetes.

Some fats are bad and others aren't. Even then, as with all food, you need to balance your intake of various types of food. For instance, having bacon once a week is not bad for you. It is only bad if you have it at every meal.