Two reasons I can think of:
1. Everyone was short in China back then. Food was scarce, especially what was required for a balanced diet. In Chinese neighborhoods in 20th century America, a family in which the 12 year old boy was a head taller than the dad was common to see; no big mystery who the immigrant was.
2. China did not have a superficial culture back then. The one-child policy and increased consumerism has changed Chinese values a lot.
I think only the second reason can make sense.
Deng is only 146-148cm tall and back then Chineses are not that short as you are imagining. I think back then China's average height was 160cm+ so he was extremely short even in the cohort during that time.
But yeah China's society is corroding due to the evil components of modern cultures such as heightism, facism, and yeah also we cannot exclude consumism like you say.
Nowadays on Douyin and Kuaishou and similar platforms you can see some 12-15 y.o girls are uploading short vids where they flaunt their faces, statures, or even with R18 elements, like showing their boobs.
But even back then, as a Chinese even I would still consider becoming Brad Pitt or Adrien Brody(relatively speaking, in China, the counterparts are Daniel Wu, Edison Chen, Nicholas Tse and etc.) rather than becoming Deng Xiaoping. Remember the things that can comprise most of your self-confidence are your height and face, or maybe I am already mentally distorted but in my perspective a good height and face can speak most volumes how much you can achieve others' respects and worships.
