I feel that there are exceptions to every rule.
Yes, I do see grass in towns as un-appealing, but in some cases it may be needed.
I"m currently working on a hack, where the towns were built to co-reside with nature, so to give it that concept, i have Taller grass "creeping" in on the towns, near the entrances, in corners where nothing else is built, and along side a river that runs though one of my towns.
I've also used it to give inaccessible areas i bit more flare, like on the sides of hills, and as gardens and "farms"
I feel it's not that it should be avoided, but it SHOULD be used sparingly, and only if it looks good, Having grass around say pallet town or lavender town is okay, but it shouldn't be all over places like Celadon and Saffron.