Recently, a member of AskAndy asked the $64,000 question - since when and why have modern men been dressing so poorly? The consensus seems to be sometime in the mid-1960s, a period of political, cultural and social rebellion. As to the question of why, however, the collective answer is less certain.
My own thinking suggests an underlying causal relation between institutional changes and changes in one's "appearance". Oddly enough, something as apparently "individual" as appearance and comportment is a highly social or intersubjective activity. Hence, I suspect that institutional changes have had a significant impact on the relaxation of apparel and dress.
At the highest level, I think one can describe the decline in sartorial standards as a decline in formal or "high" culture and the rise of popular culture. The reason for this decline I discuss in my posting in the discussion thread:
... I would suspect that the decline in sartorial "standards" in modern societies has something to do with the precipitous decline of prescribed authority (namely, cultural, political and social institutions) as standard bearers of value in society. In other words, the decline in institutionalized values (enforced for example by class or social group) means greater individual autonomy and discretion, leading to a decline in adhering to standardized forms of dress.
This is essentially an application of Robert Putnam's celebrated hypothesis (at least in academia) on the decline of "social capital" (http://www.bowlingalone.com/). Put simply, the decline of social institutions in America means that we have fewer and fewer reasons to dress up or appropriately. I would suspect that sartorial standards still exist where there are institutions that informally and/or formally enforce them.
As a case study, it would be interesting to track, for example, the increasing informalization of Presidential inaugural dress standards (from morning coat and top hat to business suits).