Does it hurt the fish? I'm not sure, but I don't think it really helps them either.
To be honest, a clean fish is much more photogenic than a dirty one. How much trouble is it to give the fish a couple swishes in the water to clean it off just before a pic? Or maybe just hold the fish out at arms length to take the pic so it doesn't have to flop around in the mud or grass?
Bleeding fish can be cleaned up too, or maybe just not post that fish. Human blood on a fish however is most desireable, it shows the fish got a good lick in during the fight and landing process!!!
I'm not condeming anybody for taking or posting these pics, I'm sure they have the fishes best interest at heart and just want to take a quick pic and get the fish back in the water as soon as possible.
Instead of whizzing and moaning about something like this in a persons report, I don't reply at all. Remember! It takes time and effort to post a report and the people that take that time should be commended not whizzed on!!! I've also noticed that most of the people that do the whizzing, rarely if ever have posted a report... and to you I say "Shut the Hell up!!!