Beauty is a very subjective concept, and as such, your engineers are correct, it's totally unique. So, by their own words, it's really weird that they know what other people wants! (note: I have NEVER, EVER seen an engineer building something aesthetically pleasant. I heard tales of engineers that can do it, but they're like ghosts: they exist, but nobody saw one!)
Out of jokes, beauty is subjective, but it's also a creation that molds a certain context, whether it's a time context, a location context or both at the same time. Your conception of beauty is molded but different factors, most of them created in a design lab of sort. Thus, certain color combinations that may look horrible for you today, will be like "wow, how beautiful that color combination is!". Same goes with fashion, music, literature, theatrical arts, architecture and whatever you could think of. On top of that, the economic dogma of "satisfying a need" goes into full effect because at the same time, there's people creating new needs you didn't have before
Now, this "designed beauty" also considers many technical aspects, including, of course, usability. As the technology "state of the art" evolves, so does the behaviors that have to adapt to those changes. As few as 15 years ago, nobody would have think of having phone, videos and GPS on a phone. Now, nobody can live without it (new needs have been created!).
All this intro is to explain why, while your engineers might be somehow correct in a broad sense, they're absolutely wrong at the same time. If your system evolved, your usability has to evolve. And connection with every day contexts and pleasant aesthetics will make your users more prone to use your system. Showing that you care means a lot more that showing you don't care at all. As blunt as it sounds. If in doubt, check Apple. Or tell them to drive a Lada. It does the same that any car, it will take you home. But well...
If you want to go deeper into these subjects, tale a look to the following resources: