Hmm, if someone said to me 'you dress well for a fat bloke', they'd be nursing a black eye... I'd definately see it as an insult.
Insult!!! I'd have replied to them "how funny, we're kind of like opposites because you dress awfully for some one so slim"
You should have said, '...and you make yourself look remarkably good for an ugly person!"
(You are on a diet, what they going to do about being ugly?)