Idealistic, adj. 1: [philosophical usage] Holding the belief that
there exist minds, sensations, and thought processes within those
minds, but not an external material world to which sensations
correspond. 2: [common usage] A patronizing and condescending term
used in reference to a person who holds unswervingly to the only moral
standards there are, implicitly declaring those beliefs to be as
disconnected with reality as those of a person who is idealistic in
the first sense.

What the word says is that such uncompromising faithfulness to the
call of conscience is not to be praised (at least not beyond
half-insults of "He means well." and "His heart is in the right
place.") but, rather, gently patted on the head and politely
dismissed. What the term means is that the speaker, whose own
compromised conduct has been brought to light by that of person
referred to, and suddenly looks very shabby -- indeed, all the worse
for its whitewash coat of noble-sounding words about how "We do not
live in a perfect world." and so on and so forth -- is not only
justified in compromise and lowering of standards, but actually doing
a better job than someone who does not compromise: the speaker is more
truly on the mark, and the idealistic one has the most praiseworthy
intentions but misses the goal in an excess of misguided zeal. To top
it all off, the word is not recognized as a pungent insult such as
'asinine' or 'idiotic', but pleasantly accepted as a simple statement
of the way things are.

See also: Admirable, Values.

-- Hayward's Unabridged Dictionary