"So what's wrong with [good design]? The problem is we judge books by their covers. We're more likely to pick the prettiest object up first."
Why would you value a shortcut for assessing quality more than an actual improvement in quality? The fact that design is better is a huge all around win for everyone. Does it make every product good? Of course not, but so what?
Not too long ago, you could perhaps have measured the quality of a house by the question: 'does it have running water?'. If the answer was yes, you could assume someone put a lot of effort into the house, and that everything else about it was likely to be better too. Today, all houses have running water. Is that a bad thing? That would be an absurd claim to make. The fact that all houses (even the relatively bad ones) have running water is a huge win.
The point is that running water makes any house better, and good design makes any product better. Claiming that better design is a problem is not something I can make any sense of.