I will never be a fan of Bakugou and I remain alienated by his popularity.
That said, I can kind of get why Izuku looks up to Bakugou. Izuku's idealism of what heroism means is to an almost overwhelming extent molded by the kind of heroism All Might embodies. A lot of this heroism stems from a selfless devotion to the public good, a willingness to sacrifice of oneself and the ability to inspire hope and confidence from those around him. But All Might is also a real-life hero who has, without fail, won every single challenge he's ever publicly had without fail, generally as easily as could be projected.
Bakugou embodies this latter aspect. As Deku admitted during his second duel with Bakugou, he admired Bakugou for always being able to back up his arrogance just like All Might did, no matter the odds Bakugou faced (such as beating up multiple bullies who were several years older than him). Bakugou also never publicly admitted to suffering, again akin to All Might. To Deku, a quirkless boy without hope of ever becoming a hero, being near Bakugou was as close as he could get to being near an all-conqueroing hero. So as much as Deku resented Bakugou, he also developed a twist of Stockholme Syndrome for Bakugou. Once he got actual All Might to recognize him and guide him to hero academy life, Deku gradually began to be able to mentally stand up to Bakugou's shitty behavior. But this has come at the same time as Bakugou has started to remind Deku more of why Deku ever looked up to Bakugou in the first place.
Deku didn't have any friends in particular growing up of Bakugou's circle. He was conditioned to accept it, a behavior exacerbated by his naturally dutiful, compliant and anxious tendencies.
I do think we need to see some reflective monologue from Bakugou as he finally becomes more self-aware of his own shortcomings. We got a glimpse of it during his second duel with Deku when Bakugou admitted through tears that he couldn't process how his weakness in getting captured had set off a chain of events leading to the retirement of their shared idol, All Might.