For the most part, this is covered in my answer to "[J. F.] Kennedy despised how he looked in hats and usually refused to wear them - despite howls of protest from habderdashers whose hat sales took a precipitous downturn in the 1960s" (Barbara Perry). What factors led to the downturn in menswear hat sales in the 1960s? It discusses the way that more casual dress became acceptable and stylish in the mid-20th century, which is what's brought us to the point where two incredibly rich men can be found at a public event in plain button-down shirts and jeans/cheap pants.

At the same time, much high-end fashion has also come to follow or emulate the look of streetwear; meanwhile, technology has given us the ability to cheaply imitate fabrics once only accessible to the wealthy, and the exploitation of the poor of south/southeast Asia has made it possible to refresh a western wardrobe as soon as items wear out or get boring. But I would also challenge your premise, as it is still possible to judge the quality of someone's clothing, to see that they are clearly in expensive designer gear or that they shop at Walgreens. (And your comparison artwork is also a noble family portrait in their best dress vs. an artist deliberately trying to capture the dull reality of a poor family.) It's just that the casualization of clothing has made this perhaps more subtle in everyday situations.