Ponyboy's words highlight his pride and his deep need to be respected for who he is. This particular quote is taken from chapter 11. In this chapter, we learn that Ponyboy has been confined to bed rest.
Alone in his hospital room, Ponyboy becomes philosophical as he flips through one of Sodapop's old yearbooks. He sees the picture of Bob (Robert Sheldon) and muses about the latter's home life. By now, the reader recognizes that this is the Bob who was killed by Johnny in self-defense. For his part, Johnny felt that violence was his only resort, as Bob had been in the process of drowning Ponyboy.
In the beginning of chapter 11, Ponyboy wonders whether Bob's parents will end up hating the Greasers for the death of their son.
Did they hate us now? I hoped they hated us, that they weren't full of that pity-the-victims-of-environment junk the social workers kept handing Curly Shepard every time he got sent off to reform school. I'd rather have anybody's hate than their pity.
Ponyboy tells us that he would rather be hated than pitied. To Ponyboy, pity holds negative connotations, and he especially does not want any member of the wealthy Socs community to pity him. Ponyboy suspects that pity from such quarters would be mingled with underlying contempt. Therefore, he prefers the hatred of the rich rather than their faux compassion, exhibited through their "pity-the victims-of-environment" rhetoric.
Ponyboy will never admit that he or any other member of the Greasers is physically, morally, or materially inferior to any member of the Socs community. Thus, he will never willingly accept their pity. To Ponyboy, disdain expressed under the cover of pity is an insult. As a result, he prefers to be hated.