The story I had originally linked to definitely devolved into name-calling, which was kinda unfortunate. And it did push an agenda that somehow the 50s were better (kind of a weird hill to die on, so far as I'm concerned).
Bottom line (I think) at a law firm, it was mainly inappropriate if it went beyond your standard witch/bunny (not of the Playboy variety)/Nixon mask, I suppose. It's hard to say where to draw the line. In a law firm where they defend a lot of sex discrimination cases (or sue as plaintiffs), a sexy nurse is probably a not so wonderful idea.
At the Financial Services co. this year, there was dressing up but it was also a party for people's kids, and that department is not public-facing. Plus I did not see anyone dressed up (although they were decorating long before this) until about 3, 3:30, when the first of the kids arrived (there were extra juice boxes in the company fridge for a coupla days afterwards).
I can absolutely see it at hospitals and restaurants. I can kinda see it at schools although I'm not so sure teachers would want to be doing that. It can be enough of a problem to get the kids to listen, etc. and it's possible that that could be undermined.
I have found it to be generally strange in a lot of the places I have worked at, although it's been years since I was in any sort of a customer-facing role. I think that there are some lines, and I respect companies that don't really want to be drawing them, or reminding their employees that dressing as a slut while doing auto repair is a bad idea.