Yes, there have been several mishaps at Soch--even one that ended in tragedy--but as always, the media tries to sensationalize every tidbit of information they get and run with it. Everything becomes either a tear-jerker, or a doomsday scenario that there is no possible recovery from. It's a bit sad and pathetic.
Russia vs the West is such a classic trope that its impossible this wouldn't happen. The people reporting the news skew things based on their preconceived notions, and they are used to reporting stories with stereotypical Soviet style responses. Sochi is fine, if not the best, and most places have problems.
The Olympics needs to be staged in a country that can financially and socially make whatever adjustments are needed in order to make a successful event. Sochi had all sorts of sanitary problems and unconventional living conditions that are not the norm in the United States. Athletes were affected and viewer ratings of most events were not as strong as anticipated.
The reports of hotel and infrastructure problems at Sochi have been reported not only the members fo the news medial covering the games, but also by the athletes as well. There are numerous Twitter and Facebook page created to document a issues and expose them to the world. The President of the IOC even acknowledged the problems on the public record.
No, the reporters are not over-sensationalizing the problems in Sochi, because the reporters are just reporting what they have seen. If a reporter's hotel room has stray dogs and no doors, there is nothing wrong with the reporter taking photos and posting them. If they are reporting only what they have seen, it is not exaggerated.
Prior to the games beginning, several terrorist organizations had threatened to attack the games. Already, a hijacker has been apprehended on board a passenger jet. We were less than 60 minutes away from a 2014 remake of 9/11. Only this could have been 10 times worse. And that was only one attempt.