Dear Abby: My pastor says no one would consider dressing casually if they were going to be in the presence of our president or any other dignitary. Why would we consider anything less for our Lord? Makes perfect sense to me.
Here is the assumption that you show up for this hour or more time slot where you better look sharp because you know God will be in His balcony seat looking over the masses and giving His royal wave. Meanwhile, the rest of the week, God isn't around apparently. It's time to put away this notion that God is closely watching you for this hour, so you better put on your best face.
It's a strange thing when you really think about it. Put on a suit or a dress and you can somehow fool God on Sunday morning, and then go back to your ripped jeans the rest of the week. No...that's a mischaracterization, right? The intent might not be there, but actions speak louder than words. When are we not in God's presence? When are we not in God's sight? Is worship just a Sunday morning activity with hymns and prayers? The notion that we need to look our best for this set time frame ultimately says that here is where you KNOW God is watching and here is where you KNOW you need to look decent. Plus there is the question of looking decent vs. being decent. The phrase 'whitewashed tombs' comes to mind.
This is of course an issue in the context of church, and the thought that now you're in The Lord's House and now you aren't. Never mind that all the earth is the Lord's. Never mind that God is wherever we make our beds. What happens when we become too stringent on what is and isn't appropriate dress on Sunday mornings is we begin to compartmentalize secular and sacred, God is here and God is not here.
Are there lines not to be crossed? Of course. Tube tops, wifebeaters (sorry, can't come up with another word), Speedos and thong bikinis fall on the other side of the line for church dress, among other things. But I would argue that the line is more about common notions of decency and less about God being chief of the fashion police. If someone shows up in jeans, shorts, or sandals...who cares? I would be more concerned about whether one is engaged in the worshipping community or seeking a life of discipleship more than whether one wears khaki or denim. When seeking a new king for Israel after Saul fell out of favor, God told Samuel, "the Lord does not see as mortals see; they look on the outward appearance, but the Lord looks on the heart."
Eventually, of course, David was chosen. He was the guy who later danced naked before God.
Ultimately, this is not an essential. Or at least it shouldn't be. If you consider dressing up an act of respect or reverence, there's nothing wrong with that. But what are you doing the rest of the week to show that same respect or reverence? Faith is not skin deep.