Well I mean, Final Fantasy has always been about characters who are unrealistic and from a fantasy world far removed from reality. So its never bothered me, especially since it's typical of Japanese anime. I mean look at FFIV and FFXIII. The aesthetics and looks of those characters are beyond anything in terms of looks, fashion and design. I love it.
I mean, I can understand perfection "taking one out" of a story since if one expects a grounded experience, the looks should match said depiction. When it doesn't it ceases to be realistic and suspension of disbelief shatters.
But I never thought of FF in that context at all.
You're right, FFVII
is a terrible dystopian world but it's still a Final Fantasy world where the same elements and design ethos exist. Although not a traditional fantasy, it's a techno-fantasy. There are lots of examples where the dark, dystopian setting of VII is juxtaposed with elements of a whimsical and surprisingly beautiful world.