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I think Hood is underrated, but only to the extent that he was merely a bad general and not in contention for the worst the Confederacy had to offer. What frustrates me with a lot of Civil War discourse, especially online, is the same thing I mentioned earlier about judging actions with knowledge of the outcome in place. Yes, Hood's actions look bad when we know they were unsuccessful. The problem is that, at the time, it wasn't obvious that these actions were worse than any of the realistic alternatives.
To put the whole issue into proper context: In the spring and summer of 1864, the overall Confederate strategy was hold off the Union until the November elections, in the hope that war weariness would usher in a new administration with a mandate to make some kind of deal. To this end, it wasn't critical that they score any major victories, but it was critical that they prevent the Union from getting any of their own. Ever since losing Chattanooga the Joe Johnston playbook had been to stake out a defensive position, only to abandon it after getting outflanked. He'd given Davis repeated assurances that he'd hold behind this river or whatever, then not like his position and retreat. After several weeks of this Sherman is on the outskirts of Atlanta, a city the Confederacy can't afford to lose, and Johnston is talking about giving it up.
At this point Davis, who didn't like Johnston to begin with, is getting fed up and is probably getting deja vu about the Peninsula campaign, where Johnston did the same thing around Richmond, which probably would have fallen if Lee hadn't taken over and changed strategy. So Johnston gets cashiered in favor of Hood, who has a reputation for fighting and will at least make an attempt at fending off Sherman and saving Atlanta. Hood, true to his word, launched a series of ill-fated assaults against Sherman that do nothing to stave off the inevitable and only serve to inflict casualties he can't afford to lose. Buffs like to argue that Johnston would have at least kept his army intact, but an intact army is useless if it isn't going to defend anything, let alone something as critical as Atlanta. There was pressure from the president, the state legislatures, and the public to do something, and Hood at least did something. I'm not going to comment on whether what he did was ideal because I'm not an expert on battlefield tactics, but the buffs who criticize Hood aren't criticizing his execution.
So now, to get closer to answering your question, we get to the fall, after Atlanta is in Union hands and Sherman is aiming to push to Savannah. Hood didn't attempt to stop him because he knew that the endeavor was pointless. He could have slowed the march but not stopped it; he would have fallen farther and farther back, desertions and casualties increasing with every passing mile, and there would have been nothing left of his army by the time Sherman got to the ocean. Furthermore, there would have been no reason for Thomas to keep his troops in Tennessee. He could have either invaded Alabama unopposed, or joined up with Sherman to give him 120,000 men to Hood's 40,000. So Hood made the decision to move toward the Alabama line, cutting off Sherman's communications. This would purportedly compel Sherman to leave Atlanta and divide his army, sending one wing to protect the threat to Tennessee and the other to hunt down Hood, who would get the opportunity to fight the remaining forces in Georgia on the ground of his choosing.
Sherman did indeed give chase, and Hood found the area he wanted to give battle, but Sherman showed up with his entire army, which was more than Hood could handle. At this point, Hood was stuck; if he took up a position, Sherman could do the same, and hold him there while Thomas came down from Nashville to hold him while he turned toward Savannah. Or he could hold him while he sent Thomas into Alabama, before turning toward the sea and forcing Hood to give chase, which wouldn't do anything but waste Hood's time. So instead he decided to give up Georgia and head north to Kentucky, hoping he'd have better luck where he wasn't at such a numerical disadvantage. If nothing else, it would keep the Union out of Alabama.
It's worth also noting that the Confederate army was having serious problems with desertion at this point, largely driven by the hopelessness of the situation. The buffs who talk about how Johnston would have at least preserved his army don't realize that no one wants to spend weeks putting his ass on the line in rear guard actions defending land you intend on giving up in a few hours without any immediate prospects for taking the initiative. On the other hand, if you go to Tennessee where you can win a few battles and keep the Yanks out of Alabama, there's much less temptation to desert. If nothing else, it might force Sherman to pursue and backtrack out of Georgia.
For Hood's part, he was wildly overambitious, thinking he could march straight into Kentucky, replenish his army with locals, and force Sherman to abandon Georgia to keep him from crossing the Ohio or, alternatively, that he could march from there into Virginia and hit Grant in the rear, crushing his army. Fantastical, yes, but at this point in the war, the only way to keep morale up and preserve any chance of winning is to go for a knockout blow. Even defeating Schoefield would have been enough to effect a short-term reorganization of Union priorities. Again, we can argue about whether poor tactical decisions led to Hood's downfall and the destruction of The Army of Tennessee, but criticism of Hood isn't that he blundered away good opportunities; to the contrary, if anything good is said about him it's that he was a competent corps commander under Lee but was too aggressive to command an army. His actions were all failures, but it's not like there were a ton of obvious alternatives.
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