Diana, I totally agree that wearing corporate dress in an academic environment would get me some strange looks. And I agree that, after getting tenure, some the outfits that I've seen on colleagues can rival anything that I've ever seen on a student! (Like one of my colleagues who showed up in his PJs and a ripped suit jacket he had found in a second-hand store. The rest of us were too stunned to look away.) But I think there is a wide range that exists between a corporate suit and that outfit worn by my colleague.
My concern, however, is how easily casual dress can turn to inappropriate dress. When I first started teaching at the university in the early 80s, dress pants and a jacket was pretty standard attire for the younger staff. With the advent of casual days, dress codes changed to the point where I now feel totally comfortable wearing dark jeans and a structured cardigan when teaching my grad student seminars. But, even with the move towards more casual wear, younger staff members who interpret this trend too liberally and show up in uber-casual jeans, a tank top, and flipflops don't do themselves any favors. We tenured staff may not say anything, but it often is the subject of comments behind closed doors, with some of the most negative remarks coming from the worst dressers, oddly enough.
I've always maintained that, if you are truly brilliant, you'll get the position regardless of your clothing or personal grooming. But, if people are looking for a way to weed out candidates, personal appearance influences the decision process, even if it's not directly articulated. It may not be right, but it happens. That's why I tell my students to think carefully before they start trying to expand the fashion boundaries of their workplace.