I think that the music business is about 75 percent image and 25 percent talent. I mean, if an 'ugly' person is an exceptional talent, a studio will spend the money to remake the image into whatever they see as accepting. On the other hand, if a 'beautiful' person has the image they're looking for, you can manufacture the talent through Pro Tools or Autotunes.
In heavy metal, though, if a person is considered too good looking, a studio might try to grit them up a little bit as the metal fanbase is very loathe to accept 'beautiful' people in their scene. That being said, I think the fans ultimately decide what image the studios give us. If they take a chance on someone not of the traditional image and it doesn't sell, anyone not of the traditional image has a snowball's chance in hell of getting a deal. Is it sexist? Yes, against all genders. It reinforces negative stereotypes and sends the message that you have to look a certain way to make it, no matter what your talent level is.
I'm going to admit my own biases here. Listening to primarily heavy metal, I have a hard time accepting it from good-looking musicians. If it's dirty, ugly music, part of me wants dirty ugly people to be playing it. I work against that bias in myself (since I hardly ever look at the musicians playing it), but being in a scene as ornery as metal makes it a difficult, uphill battle. More so, when you're fighting yourself most of all.