There are definitely a proportion of parents who are deluded about their child's looks. These must be the same ilk who go on ex-factor thinking they can sing or supporting a relative who has no talent. Shit in your eyes/ears.
There is a big difference between YOU thinking your child is beautiful and thinking that EVERYONE ELSE agrees.
A friend of mine has a DD who is probably slightly above average looks wise but for the last 15 years I have had to sit through hours of discussions about this girls 'beauty' and all the problems it is causing e.g. Bullying from other girls. Even in the maternity hospital she pulled me to one side and said "I feel so awful having a baby this beautiful in here. Have you looked in some of the cots?...it must be making all the other mothers feel really bad...I'm going to discharge myself, it's just not fair"
She wasn't joking and her baby looked awful at that stage (as many newborns do). She is a lovely, intelligent, caring person but I suspect she also over-estimates her own beauty in her head.
I have 3 DCs and only one is very attractive and he has a different father to my youngest two.
My middle DC looked like William Hague for the first 6 weeks, bright ginger hair on the sides of her head, nothing on the top 
I went through a stage of being pestered by a friend to vote on beauty contests for her DS, she entered everything going and was convinced he was an absolute stunner. He was so unattractive I just couldn't bring myself to vote. He was a lovely natured child but not a looker. After he didn't win anything after a few years I think the penny dropped.
Parents are so sensitive about looks.
The mother and baby group I went to with William Hague my middle child had a baby there who was breath-takingly beautiful, I used to say she could have been on a knitting pattern.
All the other mothers would glare at me if I mentioned it as if I was saying their baby's resembled Satan's scrotum.