A major theme of Monsters University is that Mike just isn't scary. His teachers tell him this. Other students tell him this.
Even the children at the end of M.U. aren't scared by his direct appearance. The kid at the end of Monsters Inc. is also more bemused than frightened when he sees Mike.
What I don't understand is, why isn't Mike considered scary?
Granted, he isn't the most frightening monster around, but I still think children would be afraid of him. He's a green, scaly one-eyed creature with fangs and claws. While audiences might find him "cute", to the humans in the movies, he's a strange entity who sneaks into childrens' rooms at night.
It's especially egregious, given that all the other Oozma Kappa members evidently are scary, including this bozo:
What makes Mike so unscary in this world?