As an extreme worst-case scenario, consider post-war high-density architecture. With a few exceptions, they are various degrees of slum today, not because they lacked functionality (that came later when they were left to deteriorate), because anyone with the resources to left.
Back to software, I have had the pleasure of replacing a good number of ugly but functional line-of-business systems, and the eagerness with which users will adopt the new thing, almost entirely because it's pretty (it often doesn't much new for many users, the main improvements are on the backend and for power users), always catches me a bit off guard.
On the personal level, I've found that investing a bit of time up front in making a new thing pretty increases my personal level of happiness working on the thing, even if I end up changing entirely away from the original look as features evolve.