Hi Layla,
Though this perhaps used to be the case I don't think it is like this for quite a while now, and I would guess it has more to do with some examples you recently saw or have in mind. I'm not a great connoisseur of modern art, but I think that actually lately prettiness has taken a more and more crucial role. If you look at people like Matthew Barney, who I dislike but is very considered, it is both disgusting, but also very pretty. (You can say he shows the deformity of pretty or whatever, in any case he cares about it being pretty. As I said, I don't like him). I don't sadly remember the names of most modern artist I've seen to give examples, but a lot of it, even most of it, is very pretty. If anything I would say that prettiness has moved to be more crucial.
But, like you say, they need to be "shockingly ugly". Why? Well, you define beautiful as communicating some kind of emotion, and this is the easiest and most sure fire way to do it. How else would they create an emotion in you rather than by disgust, by the ugly. It is simply much easier.
On the other hand what can we expect. They can't create a greek vase, that would be ridiculous at the moment. They can't paint a simple pictorial image as again it would simply be ridiculous. So they need to do something. But, if you look at paintings by Gerhard Richter for example, they are magnificent, extremely pretty I would say, at least some of them.
What then am I saying: I think your distinction has more to do with good art and bad let's-call-it-art. Like you describe Giacometti's dog as pretty, when art is good it does not only communicate an emotion but is also pretty, at least mostly so, though actually not always, I think.
It is true that most art which is done nowadays is simply very bad, and then seems ugly to us, but to repeat, I think it is because it is bad art.
I'll give you an example. I don't know if you've seen the movies of Todd Solondz. I can tell you that in all his movies, and increasingly so with every movie, after about 10 seconds into the movie a deep feeling of disgust takes over me. Not a shallow disgust but a deep revulsion, and I feel my body shivering (more than in any other movies I've seen). It keeps this feeling throughout the movie. I will also say I find him one of the most riveting of current filmmakers. He is simply brilliant and his films, even though they are disgusting, are actually quite pretty I would say.
I would also recommend seeing Palindromes, which is his last movie, and is also about how our reaction to what is said depends so much on the body which says it, and how pretty it is. (Also would like to recommend Storytelling, as I would all his films).
(As an aside, regarding prettiness, I just looked and saw he is currently filming his new film and Paris Hilton is rumored to be in it).
Films Discussed