I don't think this is an insult at all, and quite frankly, I'm fed up with the liberal elites telling parents what to do. How can anyone find such a phrase insulting. All it means is you're upset. My mom told me that when I messed up one time, running the halls in elementary when I was in elementary school. It made me feel guilty deep down. There's a difference between "You disappoint me" (an insult) or "You're a disappointment" (also an insult). And saying you're disappointed in someone (insert "you" or the person).
Usually another thing, that phrase is reserved for foolish choices which were never intended to harm others, like drinking or smoking.
Besides, in family movies, I always find scenes with that phrase kinda touching. Of course it hurts, but it hurts like a needle taken in a hospital to cure someone.