Oh my, I watched that show ONCE on Netflix with my very down to earth daughter, and she just went NUTS wanting to do it! (She's almost six.) I think to them, from the outside, it just looks like playing dress up on steroids, and I mean, who doesn't want to wear a beautiful ball gown and fancy tiara?
I would never EVER allow her, push her, encourage her, or anything to do a pageant, and my husband would DIE before he allowed it. I honestly believe (and I don't care if someone gets mad) that it's TERRIBLE for their self esteem, and teaches them to value the most ridiculous things.
However, there's a solution...get your daughter some fancy play dresses (believe me, you can find fancy ones that aren't too expensive...try costume shops, Cracker Barrel around Halloween, etc) and some fancy jewelry from Claire's around prom time (coming up!) some gloes, shoes, whatever...and let her play at home.
Because, and I honestly believe, the only thing THEY get out of it is imaginitive role playing, and THAT you can provide! Without all the insanity!!
Good luck, and stay sane and pageant free! :) I am so with you, though!