The purpose is to depress the citizens so that they don't get any ideas and keep in their place. If you are surrounded by beauty and grandeur you start getting ideas that don't fit with the low level of mind the rulers want you to have.
Yes I suspect so. Deliberately ugly buildings are intended to demoralize people. Beautiful buildings don't require great aristocratic wealth to build and maintain, and in fact the cost of ugly modern architecture is often far greater than conventional construction due to material and design problems caused by the architect's 'novelty'. When large amounts of money and effort are put into designing something that turns out to be extremely ugly, it's fair to conclude that it was intended to be ugly.
You realize the "beauty and grandeur" you are referencing comes from aristocratic families boasting about their wealth and making it obvious to the poor that they are better than everyone? The buildings you are thinking about were quite literally made to humiliate others and boost some rich guy's ego. So much for values and tradition
Is it? The most beautiful building in my city are late 19th/early 20th century brickhouse schools, hospitals, and rental condos.