I've been told that it's bad form to introduce a subject with a dictionary definition. But here goes:
It seems to me that the word has a range of meanings.World English Dictionary
1. of, belonging or relating to, or characteristic of sects or sectaries
2. adhering to a particular sect, faction, or doctrine
3. narrow-minded, esp as a result of rigid adherence to a particular sect
4. a member of a sect or faction, esp one who is bigoted in his adherence to its doctrines or in his intolerance towards other sects, etc
The problem with using the word "sectarian" on a Buddhist board is that we live in culture where the word is frequently used to indicate the more violent extreme that we see in theistic traditions. The thing about sectarianism is that it always looks silly to those who are not well versed in the tradition that has such divisions. For example, since I am pretty ignorant of Islam, I have a hard time understanding what "all the fuss is about." To me it all looks like they are worshipping a deity of some kind and squabbling over rather petty differences about what that means. To them it's clearly not so negligible, and it has lead to huge cultural and political divisions and even physical violence.
To non-Buddhists we our arguments probably look pretty weird. Like really weird. Buddha nature (Mahayana) vs no Buddha nature (Theravada). And I think that our differences manifest in pretty tame ways in comparison to the sectarianism that we are used to hearing about. The problem is that to a lot of us, these differences are not negligible because they actually have a direct influence on the way that we practice and behave.
So the second problem with the word "sectarian" is that it seems to imply that these differences are negligible and we shouldn't argue about them, or shouldn't discuss them. But which differences are a big deal? If differences aren't a big deal, and we shouldn't distinguish between Theravada, Tibetan Buddhism, Zen Buddhism, Nicherin Buddhism, etc. then neither should we distinguish ourselves as Buddhists, and ignore the fact that we follow teachings rooted in intention/result (kamma/karma) rather that teachings rooted in the existence of an eternal and omnipotent deity.
And in fact there are people that do take this position, including again, some Buddhists. This is also the position of scholars who focus their attention on "Parallels" in mythology and religion while not quite studying the depths of any one particular tradition. This was also a position I held when I was reading such scholars and before I began to study the Pali Canon in any depth. (I think probably others of us have been there.)
I actually do not have any problems with the first two definitions of sectarianism above, but unfortunately that is not what most people mean when they use the word. They are usually implying something more sinister given by the second two definitions, and further implying that the differences between the sects is something that ought to be ignored and not squabbled about. I completely disagree with this position, and I think that the differences are something we should recognize, but also something we should argue and squabble about because many fruitful discussions can arise from it. I am reasonably certain that this can work in Buddhism without escalating to any of the extremes that we've seen elsewhere.