OP I feel ya. I date lots of 5-6s but I'm always kind of ashamed to be seen with them.
In fact the other day I was out with one in a beach town near me and we ran into a (male) friend of mine. We all had a drink together and when she went to the bathroom I felt the need to give him a "disclaimer" -- ie., I'm not that into her, the sex was easy, I'm dating other women, etc. He laughed about it.
On the other hand, the few times I've dated an 8+ I went out of my way to show her off to friends and family and post pics of us together on Facebook.
Pretty interesting, though predictable I guess.
To address the points the others made here, I agree that if a woman is average or better looking she will increase your standing with other women. I brought a 5 with me to my grad school once. She was very average and a little overweight but a really funny, fun girl to be around and she was making me laugh the entire time. Other women saw us together and me smiling and they were giving me looks like they wanted to get with me. It was so obvious that I remember it 10 years later.
So part of it is the effect that the woman is having on you. If you're with a woman and you both look very happy, that will attract chicks as well. Even if she's not all that hot. Women might even look at the two of you and think, "He looks really fun, and I'm hotter than the girl he's with, maybe I should try to move in."
However if you bring some hellishly obese fugly along with you, it's only going to raise eyebrows unless you're just as unattractive. Women are extremely superficial when they judge each other. They basically base it 100% on looks initially.