Why people say Nadal isn't playing as beautiful tennis as Federer?

The difference is that Federer plays "classic" tennis (or as close to classic tennis as exists these days) and does it as good as anyone ever has (good form and exceptional footwork). Nadal's game is based upon his physicality (the more recent injuries are a testament to the pounding he visits upon his body).That means that Federer's tennis is a more "pretty" game. In learning the game you wouldn't want to try and emulate Nadal's strokes, but Federer would be a good pattern to follow.