- Many view fashion as an art form, and like any art form, there will be critics of what is good and what is bad. People do this with the culinary arts as well. We all know taste is subjective when it comes to food (sometimes you just don't like something), but people still rate it and come to a consensus on what is "good". For some reason (usually a wealth of knowledge and experience), certain people are regarded as having more refined palettes, and their taste tends to set these standards. This is also kind of comparable to music critics - it's just people who know a lot about that subject and are considered to have refined taste. Call it an "expertise" I suppose. Being so subjective, the standards are very much questioned and debated as with any art. For people who like fashion, it can be interesting to discuss it as music & art can be interesting to analyze.
- In everyday life, "fashion" is more functional than anything. Outside of the obvious function to cover, provide warmth, shield from the elements, etc,
another function clothing serves is a social adhesive. To conform within the basic standards for your culture makes people comfortable and shows the correct attitude towards whatever function/situation you are in (ie. "respectful" or "casual"). This is why "appropriateness" is rather arbitrary and why it changes over time, just like fashion changes. In short, it's symbolic of what is considered the appropriate attitude for a context and is determined by some group consensus, where once again, there are a few of those "experts" leading the way. You could say that Fe is behind these values. This is possibly why SFJ profiles say they often have non-offensive "good taste" in their attire and home decor, if not exactly adventurous or aesthetically breath-taking.
Another function is to send & receive messages, which was touched on above regarding attitude towards a situation. People say "don't judge a book by its cover" because people DO form first impressions based on appearances. People make connections between aesthetics and non-tangible qualities. This may seem unfair, but people do it with everything - otherwise we'd never think about anything beyond its literal meaning. In the same way that we look at a painting or hear a song and a feeling is evoked from it, we can respond to the aesthetics of fashion.
So, fashion also provides a tool for expressing yourself wordlessly. You have control over how you present yourself, and it's not too difficult to figure out the connotations of certain clothing & styles. You can use it to your advantage, almost in a manipulative manner, or you can dismiss it and deal with the "consequences"; I find people who are "dismissive" towards fashion in a sense use fashion to express their feeling about it - they purposely ignore the aesthetics of their clothing & non-literal functions to make a statement. Other times, people who ignore their appearance do so out of a lack of self-worth - to the casual observer, the two can be confused. Making an expression of any kind leaves you open to interpretation and criticism. Some people express more "articulately" with their taste than others. How serious people take these expressions may depend on how they respond viscerally to another person's style, what underlying meanings they perceive.
As for shunning someone in everyday life because they dress "poorly" or "strangely", well, I personally agree that is ridiculous. I'm not "invested" in judging what other people wear, but I won't lie and say that I don't form some impression of a person - I have eyes and am affected by what I take in with them. I also do see the value in these Fe (& Si) standards of appropriateness & the harmony they seek to promote, but they definitely need to be shook up from time to time, and not allowed to become extremely rigid. Dress codes with specific rules annoy me a LOT. Basic concepts of what is appropriate do not.