> Surely they didn't know what "hacker" meant until the media started using the word?
Yes, the general public's (mis)understanding of the word hacker didn't come out of thin air, but I really think the term has such a wide currency now - in its meaning of someone doing bad things with/to computer systems/networks - that it'd be hard to change.
One reason is simply that the word sounds right, it sounds destructive - in non-computer terms someone hacking into something suggests - for example - a person hacking into a tree with an axe.
Computer types, including hackers, should just accept that there is a different understanding of the term in specialist circles than there is amongst the general public. This is common across so many other fields apart from computing. Either that or they should give up and come up with a better name for hackers (and "whitehats" is no good, not least because it sounds like they're the KKK!).