1) there is no accounting for taste. believe it or not to the client this may be the pinnacle of aethetics. A frank discussion may be necessary.
2) BUT dont under estimate tricky clients ( welcome to scope creep country) I have across clients with whom I have made an agreement to code and produce a site, with basic graphic design based on provided materials ( product shots, bg, people, etc). Essentially the low end of my service spectrum ( thus the lowest cost ). the images provided were off a 1MP cellphone camera ( this is not to mention poorly lit and framed). When I pointed the quality of the photos to the client he actually proposed I go through the company directory and schedule time to shoot all their employees, and products with my equipment. Clever way for them to try to get 1500hrs worth out of a 30hr contract.
Another good case was one, seemingly informed, client who wanted another "simple" informational page with branding/art direction/design based on the company's logo. When the logo file came to me it was a large b/w screen capture of the company name typed in MS WORD! When I called the client back, simply to confirm the font/text treatment as I figured I could obtained cleaner results by simply TYPING in PS rather than masking the file they had sent the client reveled the expectation that since I did such nice logos I could do the logo for the site so that it could then be based on MY logo design( a file I would assume they would later also want for the rest of their campaigns and branding). Remember however that the original agreement specifically stated they would select/provide the logo/base graphics. So clients can be intentionally sneaky.
3) But maybe they aren't evil. This could be just the limits of their budget. Sometimes they just don't have the connections or $$$ and their entire branding/promotions/etc is done by 'a friend', who isnt even a graphic designer , working with MS Paint. So then is up to you, do you want to provide all those free hours of work?
I usually code and design with everything begin treated as an "element" anyway. Generally the best thing is to concentrate on what you were hired to do, SPECIFICALLY, so if you were hired to code a site give deliver the best most efficient code you can. It's possible at a later time they may have proper design and production budget( for graphics) and they may then re contract you for updating the site with the improved artwork.
An art direction tip: no matter how tempting, don't fix ONE OR TWO OR A FEW of the "most important" pieces of artwork when putting the site together t will make the rest look more awful. It's all or nothing.