I have to agree. A tender hearted review, although well-intentioned, is of little value. When I go to critique groups I want people to shred my work. Seeing flaws, regardless of how many or how harsh the delivery, improves the work & helps me grow as a writer.
Another thing a fully honest review does is help an author grow a thick skin. If they can't take a harsh critique then they probably shouldn't be a writer.
I agree with both of you. If you have to go out of your way to water down an honest review with good points here and there, you're really creating a false impression to the author. Your desire to attenuate the impact of the negative comments is going to do just that. But you don't want to lessen the impact of the negative comments, in my opinion. Those comments are the ones that are going to help the author. The positive things you search out and throw in to try to balance things out aren't going to do a damn thing when it comes to making the author a better writer.
If there are positives worth mentioning, then great. You want to reinforce those. But if you are searching for positives just to balance out what is a negative view, thereby lessening the negatives, you aren't doing anyone any favors.