[dang]

I agree. It's important, and tricky, to strike the right balance. We're not calling for sugarcoating. That's why the last guideline says:

  When something isn't good, you needn't pretend that it is. 

I'm not sure it's best to have this as well, though:

  But in that case, consider saying nothing.

... because it slightly implies that criticism isn't welcome. Substantive criticism isn't the problem—gratuitous negativity is. So we may revise this.

Edit: We changed it to:

  When something isn't good, you needn't pretend that it is.
  But don't be gratuitously negative.

In other words, you don't need to sugarcoat, but nastiness is unwelcome.

The key word is "gratuitous". Substantive criticism is neutral and about the work. If it's personal or snarky, that's gratuitous.

[saturdayplace]

Those last two sentences might be worth appending to the guideline </2¢>