Of course it's more important to be kind, but beauty matters.
I agree with the general parenting principle that it's important to praise the act, not the child. We don't say, "You are a great artist." We say, "Look at how you used those colors. And so many of them!"
We don't say, "You are brilliant." We say, "I'm proud of how hard you studied for that test." Or "The Almighty gave you such a good head."
So I'm sympathetic to the idea that this should apply in terms of appearance as well. We don't want our children (especially our daughters) to be focused on the superficial. We don't want our children (especially our daughters) to spend an inordinate amount of time on their looks. We don't want our children (especially our daughters) to be proud of something that they didn't accomplish, that was a gift from the Almighty.
But perhaps they could take pleasure in it.
Can we completely divorce them from the world around them and its emphasis on looks? Perhaps it's not an entirely secular idea but something built into the hardwiring of women. After all, it's a mitzvah for a husband to give joy to his wife on Jewish holidays by giving her clothing or jewelry. (No, a new pot just won't do it).
The Talmud says that at a wedding one should praise specifically the beauty of the bride (it doesn't say anything about praising her character). We go out of our way to enhance the beauty of the bride in front of her groom, not just on her wedding day but throughout her marriage.
If our husbands came home and praised our sense of modesty, we might be gratified. If they appreciate the care we take in getting ourselves ready for Shabbat, we would be glad they noticed. But if they didn't also tell us how beautiful we looked, we'd be let down. There would be a hole, some self-doubt. We may wish we didn't feel like that. But wishing won't change reality. This is how the Almighty made women. (Not the ad industry.)
After the destruction of the Second Temple in Jerusalem, our sages enacted many restrictions to reinforce the sense of mourning and exile. But they were very clear that while certain frivolities would be prohibited, cosmetics could and should continue to be sold!
We want to balance complimenting our daughters' looks with praise for their positive character traits. We may even want to overbalance towards the character traits. But as they get older, their looks take on even greater importance to them and we need to be sensitive to that issue. Teenage girls especially, need lots of affirmation. If they don't get it from their parents, they may, God forbid, look in inappropriate places. (Husbands take note: this is a danger for wives as well).
Of course it's more important to be kind. But they're not mutually exclusive. You can be kind and beautiful, not movie star or model beautiful, not a magazine cover illusion, but each of us is beautiful in her own way. And not just our souls, but our bodies as well. It's something all of us -- and our daughters -- need to believe.