Because he still terrorized the neighborhood Vito lived in, and remember he claimed to have a license from Maranzalla to extort money, so my guess is that people who weren't paying him were still probably wary of him, just in case he wasn't full of shit and really did have connections.

Vito became "such a hero" for killing Fanucci mainly because he was the only person (barring the three punks who cut his throat) who stood up the Fanucci instead of just ignoring him, so it showed to the people of the neighborhood that Vito wasn't just some run-of-the-mill Italian immigrant hood.