As for why a kohen with a deformity is unfit for sacrificial duty, Lord Sacks suggests that the Temple had to be so focused on life that we don't want to draw people's attention to our own fragility and mortality then (unlike some cultures that made death a big part of their ritual).
Rav Sampson Rafael Hirsch (on Parshas Emor; Vayikra 21:17) explains (in part) that Hashem is asking the blemished Kohen to avoid service, because the world will look at the Temple as a place for losers, or the desperate seeking mercy and salvation only. This will "profane" the Temple. The profanity here is that the "awe" of the Temple will be lost because the masses will say that religion is great for the handicapped or abnormal, but not for people with a "real life". Those with obvious problems seek out religion. But if you have a vibrant life already, why turn to G-d?
Hashem so to speak is asking the blemished Kohen to "please abstain" so as to save the Temple from losing its effect on society. The whole, healthy Kohanim dedicated to the service of Hashem, will show the people that serving Hashem is a vibrant lifestyle that grants all blessings.
It is also good to notice that Hashem does in fact award the rights to eat holy food to a blemished Kohen. He is just commanded not to be an official employee. Therefore there is nothing against the blemished Kohen. It is just what the lesser members of society may think and how their attitude would be affected.