Because, as is clear from observation, he clearly believes that the most devastating way to demean a woman is to attack her physical appearance (ie her s-xual attractiveness to men). It's as if he thinks all a woman's value comes down to one thing, her f--king ability: if she's not hot, she's nothing. A nothing and a nobody who "may not even exist".
Also, he seems to think that women see themselves this way and therefore will just shrivel up and die if they find out that he doesn't think they're hot.
And he is so committed to this notion that feminine value = s-xual value, he applies it to his own daughters. Aloud. No clarifications, disclaimers, or any apparent qualms. When he wants to praise The Good Daughter, he says that she is s-xy. In this case, he wants to insult her daughter, so he says that she is not s-xy.
You'll notice, by the way, that he doesn't do this to men. Well, in a way he does, like with women, he attacks men on the basis of hegemonic compliance. Because he's such a simple man, his standards of compliance are also simple: women are only real women if they're (their idea of) s-xy, men are only real men if they're (their idea of) the tomboy. So he will attack men for things like being short, being soft-spoken, not "dominating" women, not taking advantage of others, etc. If they are not aggressive manly men (like him, of course), then they are nothing and should be ashamed to exist.
Fat, however, is fine for a man. Men are supposed to be visibly successful, take up a lot of space, and don't care too much about their appearance! (In fact, his refusal to put effort into appearance shows how domineering they are!) So, in his opinion, that's not a basis for insult.
