They all realized that Pretty Hurts was a terrible song and a flop but they didn't want to be rude to Sia. Pepcé had a different reaction because she was so desperate for a hit (still is) and she has no ear for pop music.
I don't think Sia felt bad for Rih. She's just a smart woman who admitted that she loves money. If I understood well, she said in that interview that most of her profits come from radio spinnig the songs she wrote so she must have known that she won't earn too much with Pretty Hurts once it's given to Beyonce. She needed to give a song to the real hit maker. We all have bills to pay.
