It's so perfect that Clary's ideal world cast Valentine as a tragically departed war hero. That's all she wants: for him to be dead and gone and not her problem, but still a good person who causes no trauma and raises no questions about Clary's own morality. Sebastian is rewritten into being the perfect and caring brother that Clary always wanted, and Val is even created as a cute little sister to embody domestic bliss; but Valentine is still dead. No matter how good a person Valentine is in this universe, Clary doesn't need him to be her father because she already has Luke. There would be no "happily ever after" unless Luke and Jocelyn were married, and so Valentine dies heroically and Luke is able to fit perfectly into Clary's family without raising any concerns about betrayal or disrespect.
The problem, of course, is Simon. In some ways it would be a perfect world if Clary grew up surrounded by loving Shadowhunters, but then she'd never have met her best friend. That's what shatters the illusion, because this vision of the "True Jonathan" with green eyes is still worthless when it means living without Simon. She might think that she wants to have Sebastian as the perfect brother, but just like with Valentine and Luke, the love she craves from her biological family cannot replace the love she actually has with her found family.
