Comportment, demeanor, dress, grooming and overall appearance constitute the first levels of information about ourselves that we offer to the observing world. They may not be the most important, but they are the first. In my opinion, that makes them worthy of effort and attention.
That said, the information that can be gleaned by examining clothing choices is minimal. You can see which items a person chose to wear, how she combined those items and how those items interact with her figure and with each other. But that's just part of the story. What you cannot see is her emotional state, recent personal history, financial situation, housing situation, love life, family relationships, personal tastes and overall health. You can see the clothes, but you cannot see what led to the purchase and wear of those clothes.
We live in a world of fashion dos and donts, in which lampooning unusual dressing choices is encouraged and rewarded. Entire television shows, websites and magazine columns exist based on these concepts, feeding the collective desire to lump style choices into "good" and "bad." Experts and laypeople alike shake their heads and level judgment, saying, "Ooh, shouldn't have worn that," feeding the artificially constructed sartorial hierarchy, the notion that there is one right way to be stylish.
Delineating what others should or should not do is a very loaded action. It implies that what they are currently doing is wrong, bad, inherently destructive or negative. It implies that they aren't smart enough to figure that out on their own. And therefore, it implies that the person leveling judgment is superior, since she was able to draw the conclusion herself.
Saying that a woman "shouldn't" wear a top that loose or pants that tight, that she "shouldn't" expose her upper arms or style her hair a certain way, is saying that you know better. That your opinion carries more weight, that you are more informed, that you are enlightened, while she is ignorant. Declaring what another woman shouldn't wear is akin to assuming you know what's best for her when, in fact, you have no idea how her choices were made, what factors motivated them, what is going on in her life, what her resources and constraints may be. You may be Anna Wintour or Tim Gunn or Rachel Zoe and have all the expertise, history and influence in the world on your side, but you're still not psychic. What you see in any given outfit is the tiniest sliver of a person's big picture.
The next time you feel yourself judging someone based on dressing choices alone, pause. Consider how much information you're using to form your opinion, and what you're gaining by scorning or praising that person. Even silently. Just because someone has made a choice that you, yourself, would never have made doesn't mean that choice is inherently wrong. Many people strive to project their best selves through their dressing choices. Many others are working within invisible confines and doing their best with the resources at hand. Neither group can fully control how their appearances will be interpreted by observers, and neither will achieve sartorial perfection every day. So focus on your own dressing goals and choices, and try to avoid judging others for theirs.