If you have the skill to do pixel art then it can greatly reduce the development cost and time of your game as well as greatly reduce the install size and required processing power for your game. So that is awesome.
Second, pixel art can look very good if you are good at it and stands the test of time very well. Super Mario World, Gimmick, Chrono Trigger, A Link To the Past, all of these games used pixel art and still look great today.
Third, pixel art has a unique advantage in that it does not actually show what is being represented, it only suggests it. For example, what does link actually look like in ALTTP? The answer is whatever you want him to look like. The low fidelity of the medium allows the player to fill in the details with their imagination. And the imagination of the player will always trump what you can bring to the table.
That all said, pixel art can also crash and burn really hard. Like any medium, you have to understand it before you can use it properly.
Also, I like your piece, but it is a little hard to look at. I think it has something to do with the colors you chose, they make it hard to focus on the image correctly. But the shapes and especially the characters are very well done.
Last of all, I really don't see how someone can consider Yoshi's Island butt ugly. You guys are just wrong, sorry. You may not like it but that is a beautiful game.