What made them so notorious in Cyrodil to be hunted down?
Well..let's see...in Oblivion, a cult of Mehrunes Dagon worshipers opened about a hundred gates to Oblivion, causing hundreds of people to die, Kvatch to be burned to the ground, Bruma to narrowly avoid the same fate, and two Emperors to be killed.
In this same time frame, a cult of Necromancers led by Mannimarco kidnapped and killed a number of mages, and waged war against the Mages Guild.
To add insult to injury, during the entire Oblivion crisis a demigod called Umaril and his daedric followers quietly moved into an abandoned Ayleid ruin, and commenced to wage war against the Imperial Church.
It would be ignorant to assume all daedra worshiping sorcerers and necromancers are evil, as many of them obviously aren't, but ignorance and superstition when bolstered by the actions of a small group of fanatical "heathens" is often the root cause of various Crusades and Inquisitions. It's possible the Synod was formed by certain Chapel priests and crusaders who felt their values and way of life had been threatened by witches long enough. I imagine its formation was a slow process which took a decade or two to solidify. Groups such as the Knights of the Nine were probably merged together with the existing Church to form this new organization.
That's all just speculation but it's based on events we've observed and the logical response that people would have to it. "Our nation and our way of living were attacked viciously by heathens and witches several times, leading to a decline in our culture. We have got to crack down on such behaviors.", etc.