The issue is when people want to impose their dress code on others, especially for non-client/customer facing roles.
Putting a large emphasis on the dress code has downsides as well. The more focus people spend worrying about their attire and judging others, the less focus they have for more substantive matters. It's an easy crutch to dismiss someone for dressing "wrong", a crutch which plenty of lazy employees and managers are happy to latch onto.
I think de-emphasizing dress codes encourages a more productive workplace.