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Ultimately I think the biggest reason "why" is simply a reflection of what MUD's are for most people, an escape. Who wants to escape the regular world where they might be teased for their weight, height, proportions whatever, only to encounter it in a mud world? Assumably it also mirrors what most people in society see, the "beautiful" people having more friends, doing more things, and having more fun (at least on the surface).
Obviously you can't apply such generalities all over the place as not everyone fits into the above category. I'm assuming most of the more developed and less "pretty" characters are honestly those that are comfortable with themselves enough they don't have to worry about such things in their fantasy world.
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