She is not bad looking. Given that so many people in the U.S. are horribly overweight, she is probably above average. However, average should not be the benchmark that people aim for, because people are not born average. She probably has superior genetics, which allows her to look okay even though she isn't taking care of her body.

But this actually gives us a good lesson on human psychology. She isn't dumb, she knows where she stands. She knows that losing weight would make her look better. She knows that losing weight would make her more healthy. However, people typically find it more important to get validation from others. They end up riding the emotional roller coaster of feeling great when other people validate them, and feeling like shit if other people do not. That is not conducive to long term goals. The emotional roller coaster is why people end up on swing diets, they starve themselves to get skinny during swimsuit season and then they binge and get fat in the winter.

Long term success comes from staying rational and seeing the truth. Some people are addicted to feeling good and they think that this "positive reinforcement" will actually help them with their goals. I disagree with this idea. Deriving your value from other people's opinions is a very shaky foundation and sets you up for an epic failure. Inevitably, people get tired of giving validation all the time and you are left flopping around wondering what happened rather than methodically working towards your goal.