This is something that's always puzzled me and I've never done much research on it, over time clothing has gotten more formal and generally better looking, by the 19th and 18th centuries clothing was even among the lower classes more formal and arguably better looking than what people wear today. Suddenly in the 20th century, or perhaps earlier, we see clothing becoming rapidly more casual and simple, why is it that there was such a shift in focus away from looking good? I've always found it strange, as we see pictures from just 60 years ago where men are walking about in full suits, and now we'd see men in t-shirts with shorts. What exactly caused this phenomenon, and why exactly did it happen, especially as rapidly as it did?
hi! For the shift in fashion around the turn of the century, see this section in the FAQ (tl;dr: the French Revolution & Beau Brummel)
As for the further 'casualization' of fashion since then, see these posts for some of the previous discussion. They may not be as comprehensive as you're looking for but will give you a good start:
Can anyone explain the "casualizing" of clothing to me?
How has college-garb/fashions changed over the years?
When/Why did men wearing suits all the time go out of style?
I think maybe tastes in clothing have changed in response to the changing moral climate of society. In the 19th century it would have been unacceptable to see a womans legs, for example, so skirts were correspondingly long. Women today expect to take part in the same activities as men, so their clothes must be more practical. The more elaborate and confining clothes of females from the 19th century and back, were a reflection of their expected capabilty of being a good wife and mother and little else.
Also, during Medieval and Renaissance period, people were subject to sumptuary laws, dictating what styles and fabrics they wore according to their place in society. These codes were enforced, and at their end, it made possible for the poorer ends of society to ape the rich, by dressing in hand-me-downs and finer 'imitation' materials.
Today, clothes still denote status, but not to the degree they did in the past. The 'casual' look can be for rich or poor, but theres still a difference between the supermarket t-shirt and the designer t-shirt in kudos.