Although it would be best NOT to look at the hands while playing, in some part of the initial stages of learning and in some cases later on, this 'peeking' will occur (and maybe NEEDs to occur).
However, there are many reasons NOT to look at the hands, and to train not to look:
Firstly, if you ever plan to be able to read music and perform it at the same time, you will NEED to look at the sheet music, and not your hands (comparison: when you type on a computer keyboard, you look at the screen to see what you're writing -- not at your fingers/hands).
Secondly, as the old expression goes 'the hand is quicker than the eye'; you actually cannot fully 'see' what you're playing. This is due to the angle that you're viewing from, and the resulting parallax, and to the obscuring/shadowing of your own hand. You can't often see directly at all, or quick enough, where your fingertips are. You kind of have to 'figure out' which fingers are pressing (stopping) which strings, and which fingers are muting. This may actually slow you down. The only real use of looking (or as it should be called in this case, 'glancing'), is during large position changes up or down the fingerboard.
If you are performing on a stage or studio with lighting issues (either in your eyes, or too damn dark), you could 'get lost' or panic at the sudden inability to look at your hands. Getting to the point that you can sense with your fingers 'where you are' should be a target, and will usually end-up being faster.
Thirdly, one of the goals of playing music is to figuratively 'erase' the instument from being in-the-way between what's in your mind and the music that ultimately comes out -- what you want the sound and ideas conveyed to be. This can never really be attained, but can only be approached since all instruments have physical limits (the voice also of course has limits; for instance you may 'want' to sing a super high or low note, but the physical properties of your voice won't allow it to happen).
If you do not have to look at your hands, you can more easily see and feel the notes, and to focus on, or 'look at', the sound.
Now, yes, there's a ton of successful pros out there -- mostly in the popular musics -- that seem to look excessively at their hands. You then may say 'hey, if they are doing it, it must be right/okay'. But these people more probably became pros and successful DESPITE looking at their hands, and not because of it.
Finally, what about those fanstastic blind musicians who cannot look at their hands? They are proof that there's no need to look at your hands -- ultimately.
You have sight, so yes, use it, but use it where it's most useful. This doesn't mean never looking at your hands, but to only look when it's TRULY needed (and this won't end up being often). When you walk down the street, you don't stare at your feet, you look ahead and at other things, maybe only glancing now and then directly at your feet.