I do think there are some situations where it's appropriate to say "It could be worse," but they don't involve discounting another person's pain. For instance, when I had a finger prick diabetes test at the doctor and the nurse was extremely apologetic about having to prick me, my response was, "There are worse things that could happen to me."

Also, I went back to school to take pre-med classes after graduating in a different major a few years prior. Having been exposed to the "real world" for a few years and realizing how much more it sucks than school, I really wanted to tell some of the students that they don't know how good they had it when they would whine about how terrible their lives were because they had to write a paper or work on a group project. Obviously, I didn't say that to them, but that's another situation where I felt the whining really was completely eyerolly.