The obvious confusion is for those who come across the phrase only to be revolted. "How dare some preacher try to scare me into religion! Threatening me with a horrible fate if I don't confess what I don't believe, join something I don't like, and support what I would never want spread abroad!" This person is confused in the sense of being horrified or astounded but clear about why she feels that way. She can't believe in a deity who is a cosmic bully. At least, she can't believe in that sort of deity so as to admire, love, and worship him.
The non-obvious confusion belongs to the person who sees terror and dread of the sort I feel for venomous snakes as the motivation for religion and embraces it. This is the person who joins or avoids or tithes lest he go to hell for doing otherwise. I've seen lots of this in religion and find it hard to separate from self-interest. God isn't sought and obeyed for his own sake but for dread of the horrible consequences if one doesn't. That isn't very pious or noble.
In spite of the obvious truth that there are dreadful consequences to firing a .38 into someone's brain, tying a plastic bag over one's own head, or rejecting God, I am willing to state my conviction that panic over those possibilities is by no means the purest or even the most sensible reason for avoiding them.
When either the Hebrew Bible or Christian Scripture sanctions "the fear of the Lord," it is referring to what Eugene Peterson describes as "a fear that pulls us out of our preoccupation with ourselves, our feelings, or our circumstances into a world of wonder." Not dread but astonishment. Not terror but reverence. Not shaking-in-your-boots panic, but enraptured-with-love fascination.
The God who has showed himself in history as Jesus of Nazareth is not a thug who threatens and pushes people around. He is the God who creates such beauty in the world that we stand speechless, upholds us in our crisis moments so that we do not collapse, and would rather die on a cross than live without us.
Stand in awe! Fear his name! It is for your sake that he has given all.