I wish there was some way that I could take back every time I heard this when I was a teenager.
You'd think that it was a compliment, but usually it was a somewhat gauche insult that made me hate every cell of my body: dished out by an older female relative, this wolf in sheep's clothing was usually followed up by "Why don't you...(wear makeup, shave under your arms, your legs, wear more attractive clothing, have your hair done, do something about your skin, and above all, why can't you lose some weight?)"
The subtexts here are interesting: an ugly girl wouldn't have to do all this, since it would make no difference to her desirability, while a beautiful woman's life would be full of anxiety and disappointment, at best living her life in an unending treadmill of beauty rituals, culminating, perhaps in a round room of mirrors in which she'd practise masturbation, in perfect love and hate with her perfect self.
As it was, it had the desired effect: I went through high school an unshaven, greasy-haired, overweight, wreck. When my always-hopeful for improvement mother installed a full-length mirror in my room (to "check myself" in the morning when I went out) I smashed it. Why should I look at such a disgusting sight, if I was indeed ugly, and why should I torture myself with reproachful glances, if I was beautiful? I didn't care about Boys, as much as I cared about Sex, which I had plenty of (losing your virginity at ten does have some advantages), and I still had plenty of friends who didn't care what I looked like as much as what I thought about books and music.
I can say from experience, life is better for the ugly. I don't have myself photographed, to this day, and I have no mirror at all.