I don't know if the sentence was originally an idiom or not, but I read it from an article "My Unforgettable Father" which had been selected as one of Reader Digest's Chinese-English bilingual collections. The author heard her artistic father so commented when she saw him concentrating on an object that she deemed ugly.  Since  aesthetic is the reflection of beholders' inner activities, there is no objective criteria to determine which is beautiful and which is not. But usually ordinary people can tell pretty things from ugly ones on prima facie judgment. So it's not necessarily that being pretty is being beautiful, nor being not pretty is being not beautiful, for a particular viewer.  "Beauty is in the eye of the beholder." indeed.  But real beauty is in the mind of an artistic beholder. 

P.S.  Once I quoted subject sentence, and a colleague of mine thought it may be grammatically awkward or wrong.  But I think it is correct.