There was a time when, if you wanted to go out, you had to dress up. Even if you were going on vacation, whether you were a passenger on an airplane or a train, you had your traveling suit (most people had two or three). I can remember seeing people in 1963 wearing curlers at the supermarket (I was five or six at the time.) I thought that was absolutely rude.
Why did people dress that way? It goes back to our rural roots. We'd dress down to stay home and dress up to go out. No one wanted to see what we wore at home when we were shopping, even if we were just going out to get a couple of onions and a half gallon of milk.
With the urbanization of America, we began to dress down a lot more. The hat industry suffered. Did you know there was a time when you didn't go out unless you were wearing a hat? I usually do wear a baseball cap when I'm out today. But that's not exactly what you call dressing up to go out. That's play clothes.