Her looks should be irrelevant to her talent.
She looks like a large middle aged lady with grey hair but very interesting, and more importantly, a brilliant costume designer.
I don't see how forcing her into a flowing gown would have changed any of that, in fact, she would have been lambasted for being a large middle aged lady with grey hair in a tight shiny frock.
She looks like a normal person and everyone is just outraged as the amount of pampering, preparation, not eating for days, corsetting that goes on to get into the standard 'Oscar' frock was exposed.
She deserved to get the Oscar, and went dressed as herself, what could be more admirable than that.