Umm.

There is a line here, and the line is not "dress-code". The line is "obtrusivenes".

If someone is paying for a ticket, like some pax has stated, they can well dress whatever they want as long as they don't intrude into others personal space (like listening to loud audio would for example). If you don't want to look at somebody's clothes with holes and missing buttons, then you are out of luck unless clever scientists invent a cloaking device. People are not going to dress for your benefit.

Also, it is dangerous to judge people by the clothes they wear (cue the axiom about books and covers), *in any situation*. I fly with sweaters with a hole or two sometimes; they are my favourite clothing and I feel most comfortable in them, especially when I have to do one of those multi leg 36 hour trips from US to a little jungle village in Borneo.