In 1760, a huge budget crisis hit France. To combat the lack of income for the country, de Silhouette dramatically raised the taxes on the richest noblemen of France and instituted several laws including the melting of gold and silverware.
This didn't exactly sit well with the wealthiest of France, and his reputation among them was less than stellar.
A group (and extremely valuable) silhouette by Auguste Edouart
Silhouettes, the art form, were very popular at the time and were often purchased by all economic classes, however they were some of the only records of appearance available to people who were not able to hire an artist to paint their portrait (remember, at this time photography had not been invented). While they were well known, they were referred to by many names including Shadows, Casts, Shapes, and Shades.
In the late 17th century, the anger towards de Silhouette transformed itself into the derogatory use of his name towards anything of lesser value, or cheaply made. Silhouettes, the papercutting, took on this name as an adjective at this time.
Auguste Edouart, without doubt the most famous of all silhouette artists (I'm working hard to be #2), began using the term "Silhouette" to market and promote his goods as he did not like the name Shadow or Shade. Cutting over 100,000 silhouettes across Europe of famous people, dignitaries, royalty, and the general public, his popularity and ubiquitous nature caused his term Silhouette to permanently adhere to the cut paper artform.
Silhouette has now spread from the person, to the art form, to anything shadow or darkened outline of a person, place, or thing.