Actually that's not much like my situation. I was the one who was being accused of singing flat, and I was singing solo. It's not for me to say I definitely wasn't flat - in fact, several weeks later, I'm still quite anxious about the possibility I may have been - but I do know I got a good hand after the song, and it wasn't just friends being polite; there were several people there I don't know very well & a few I'd never seen before.

I think there's a real danger of criticism backfiring, however well-intentioned it may be. The effect on me has been to make me much more self-conscious about my singing than I ever have been before - when I'm singing alone I've fallen into the habit of pulling myself up, if I ever think I hear myself going off the note, and taking the line again. But worrying about what sound is going to come out of your mouth is no way to relax into a song - and if you're not relaxed you're much more likely to waver, falter and choke.

In short, unsolicited criticism, from my (perhaps biased) viewpoint, is a great way to put people off performing & shut them up; it's not such a good way to help them improve.