The Architectures of Control in Design blog has a great post about a Member of the European Parliament's campaign to end the use of "skinny mirrors" in fashion stores. Some stores in the UK reportedly use these deceptive mirrors to make you feel like you look better in your potential new clothes than you really do.
If, when designing a retail environment, you could a) increase sales and b) make customers feel better about themselves by using a 'slimming' mirror, why wouldn't you? How ethical is this? It's an underhand method of persuasion rather than physical control, but it could make a significant difference to sales, in the process making shoppers feel more positive, even if ultimately it's deceitful. Hewlett-Packard already produces digital cameras with a 'slimming' mode. If it helps you modify your self-image, and you like that, then I'm not sure it's unethical per se. It's just part of the great embedded architecture of delusion that fuels modern consumerism. Vanity sizing – another method of persuasion in clothes retailing – is an additional aspect of this.
Mirrors are a useful persuasion and control tool for retail designers anyway, whether distorting or not. People stop or slow down when they encounter them. Sometimes it's vanity; sometimes it's simply useful for people to see how they look.