Agree when we are talking about random people on the streets and fleeting encounters. But, for example, I would not go to an interview in sweatpants and flip-flops. There are also social situations where I expect my counterparts to be dressed with more care. It is not necessarily the right way to treat people but I've witnessed several times someone being judged in professional situations for very wrinkled, old threadbare t-shirts, as an example.
This is absolutely true. Even then, if you only need it for those occasions then that takes up a very small part of the wardrobe. A single outfit of formal wear and a small selection of normal wear is what my closet looks like, would imagine most people in the world have wardrobes like that due to the expense of clothing. I do like wearing it when I have the chance, though.
Mine is a European perspective.