Simple, mathematically correct rounded corners are often not the most visually pleasing ones. I do not know whether there are established formulas to determine the amount of additional protrusion necessary, but it is well known among graphic designers that there should be some.
CSS should have a property closely related to border-radius (or an additional value) that specifies the designer's intent to not have the border follow a perfect ellipse. Alternatively, CSS Backgrounds and Borders could suggest to implementers that they may do so automatically.