Why Was Hyperspace So Terrifying?

Because nobody knows what it is. Hyperspace was still a mystery to the galaxy during the High Republic and it was still a mystery under the Empire, and people used it every day regardless. Ships fly into stars, get dragged out by gravity wells, occasionally end up in a dimension that is not space at all, and outside a hull the place kills faster than vacuum does. (The High Republic: Light of the Jedi; Battlefront: Twilight Company; A New Hope)

An entire civilisation running on a shrug#

Start with the part that should bother everyone and does not seem to bother anybody. (The High Republic: Light of the Jedi)

Hyperspace is an alternate dimension of the space-time continuum, reachable only by exceeding the speed of light. Entry works through molecular displacement, which opens a simu-tunnel, a pocket of realspace that lets a ship travel through the other dimension without being destroyed by it. Hyperdrives do this by manipulating hypermatter particles so that a ship can jump between two points without crossing the distance between them. (Star Wars: Geektionary; Star Wars: The Force Awakens: Incredible Cross-Sections)

That is a description of what happens, not an explanation of why. It was not truly understood by anyone in the galaxy during the High Republic Era, and it was still regarded as a mystery in the Imperial Era. Thousands of years of continuous use and the honest answer never got better than "it works". (The High Republic: Light of the Jedi; Battlefront: Twilight Company)

Every trade route, every fleet movement, every family holiday runs on that. (The High Republic: Light of the Jedi)

The ordinary ways it kills you#

The everyday hazards are mundane in the sense that they happen constantly, which is not reassuring. (A New Hope)

Han Solo put it plainly to Luke aboard the Millennium Falcon: "Traveling through hyperspace ain't like dusting crops, boy! Without precise calculations we could fly right through a star or bounce too close to a supernova, and that'd end your trip real quick, wouldn't it?" (A New Hope)

The reason is mass shadows. Large objects in realspace cast shadows in hyperspace at the same position they occupy outside it, so a route has to be plotted around every star, black hole and significant gravity well between departure and arrival. Pass too close and the ship is thrown back into realspace, usually somewhere nobody will ever find it. Most problems come down to a miscalculated coordinate or an out of date chart. (The High Republic: Light of the Jedi; The High Republic: Path of Vengeance)

When it goes properly wrong, the numbers get silly. A hyperspace collision carries the energy of a capital ship's engines, which can rival a star. Even a shielded world can lose millions to the fallout, which is roughly what happens when Coruscant is involved. (Galaxy of Intrigue)

What is actually out there#

Now the part that gets under the skin. (Tyrant's Test)

Outside a vessel's shielding, hyperspace itself is lethal to any realspace species. Not dangerous, not survivable for a few seconds. Being blown out of an airlock mid-jump is a more effective way to kill someone than exposing them to the vacuum of realspace. Whatever is on the other side of the hull is actively hostile to matter that belongs in our dimension. (Tyrant's Test)

You can survive in an escape pod ejected into hyperspace, which sounds like better news than it is. Without a hyperdrive of its own, that pod can never return to realspace. You are alive, and you are staying where you are. (Tyrant's Test)

Hyper-rapture#

In Legends, there is a form of madness called hyper-rapture, and it comes from nothing more than looking. (Death Star)

Stare out at hyperspace from an observation deck for long enough and the legends say something breaks. The reasoning offered is that there is something fundamentally wrong about a realspace mind viewing a higher-dimensional universe, and that the mind does not survive the attempt intact. (Death Star)

The Empire treated this as an operational matter rather than a superstition. Standard Imperial procedure was to keep the transparisteel opaqued during hyperspace travel. Entire fleets flew blind by policy. (Death Star)

Darth Vader ignored it. He enjoyed staring at the kaleidoscopic swirling patterns, and he was not alone in finding it pleasant. Cronal described it as soothing, as looking into the emptiness outside the universe. Whether that says something about hyperspace or about the people who like watching it is an open question. (Death Star; Luke Skywalker and the Shadows of Mindor)

Otherspace, and stranger endings#

There are also outcomes that do not fit any of the above. (Otherspace)

Otherspace is another alternate dimension, related to hyperspace and subspace but distinct from both, and in Legends a species called the Charon is bound up with a hyperspace incident that left them in it. Not lost. Not destroyed. Relocated into a different layer of reality. (Otherspace)

That belongs in the picture, because the picture is the point. Hyperspace is the one piece of infrastructure the entire galaxy depends on, and the failure modes range from a bad coordinate to waking up in another layer of reality. (The High Republic: Light of the Jedi; Otherspace)

The terrifying thing is not any single hazard. It is that the galaxy has been jumping since the days of the ancient Rakata, and nobody can still tell you what is out there. (Tarkin; The High Republic: Light of the Jedi)