There are a huge variety of reasons why people do this. For some people, what they see in the mirror is not what we see when we look at them - if you asked them to draw themselves, they would draw a person out of all proportion to what they really are. It's called body dysmorphia and is often associated with some kind of eating disorder.
For others, they have a very strict ideal and any variation (even one that is fully acceptable in other people's eyes) constitutes a terrible, earth shattering failure.
Some people also might have a high need for attention and compliments. They might be highly insecure and put themselves down about their looks, weight, intelligence anything, so that people will say "no, no, you're not fat/ugly/stupid etc"
The other thing is that nobody thinks they are perfect. Anyone who looks in the mirror, no matter what size or shape, will see something about themselves that they wish was different. For some people it's their hair, others the shape of their nose, their teeth, the length of their arms, size of their breasts, colour of their skin, size of their freckles (get the sense this could continue forever?). Some people might just feel unattractive for whatever reason and just pick one of the most common ones - weight - to express.
And I doubt she'd think anything bad of you. In fact, if you said the same to her, she might even say "what are you talking about? it's only us, you don't need to be embarrassed". In fact I've often said similar to people when they claim to be fat "well if you're fat, what does that make me?". The reality is that they aren't thinking about anyone else, just how they feel about the bits they don't like. If she DID say something bad, it would be most likely to cover her insecurities about herself.
I sometimes use this to my advantage when good looking girls strut their stuff making me feel bad - I just put myself in their shoes and find something on them that they probably want to change (of course I would never judge them on this or say it to them, I just find the thing that makes them human). Then i try and turn it positive by finding something good on both me and them.
35kg lost. (November 2005 - October 2006)
15kg gained again (as at October 2010).
Back to the drawing board - Let's do this thing!
"You can't change the winds, but you can change the sails"
"Reach out and take control of what lands in your lap"