Responses
I hope this is true, because the only other reason I can think of is that everyone around him told him he was ugly because they feared his beauty for some reason, but you're idea makes much better sense.
So am I his fate ....(⊙…⊙ ) see what I did there hehehe (⌒▽⌒)
Theory:
He was cursed by someone which caused him to be ugly. But the one that is his fated true love or whatever can see his real face. So, everyone else sees him as ugly as well as himself, but red head can see his true face from before the curse.