Why is Carmen seen as a devil?

Carmen is seen by so-called respectable society as a devil for a number of reasons. For one thing, she's a gypsy, and the prevailing social prejudice against gypsies regards them as dangerously exotic and strange, engaging in all manner of weird, diabolical practices, most notably witchcraft. For her part, Carmen claims to be able to read fortunes and impresses Mérimée with her knowledge of the occult.
Carmen is also a free spirit. She is an independent woman who likes to do her own thing, and in those days, that was considered scandalous, not to say downright diabolical. In an earlier time, Carmen would almost certainly have been condemned as a witch; this was the grim fate of many women openly expressive of their sexuality. Carmen's pursuit of sexual freedom represents a threat to male society and its prevailing notions of how a woman should behave. According to the standards of the time, such a threat must be identified and neutralized before it can spread and undermine the whole foundations of society. One way of doing this is to demonize transgressors, make them seem like they're not really human, but some kind of evil force of nature. Once someone has been identified as such, they can more easily be ostracized and removed from mainstream society.