I don't think they do any more than sending a girl to the average highschool to be honest.
If you want to get an idea of how stressful and hostile the world can be, you only need to step into the halls of your local school.
I get that the pressure from beauty pageants can create an unnecessary anxiety, but some people like the competition and the showing off.
I guess it's the girls that end up "stuck" doing the pageant rounds because that's what their parents wanted for them, maybe those girls don't have such a great time.
Also, in terms of whether these pageants make other "ordinary" girls feel insecure and lower their self-esteem, that's possibly true... But how is that different from cheerleading, modelling or being on TV?
All those type of women are portrayed as "ideal" in one way or another - which kills the confidence of anyone that does not fit that mould. Well that's what I think anyway