I have to admit when I see people on Stros M'kai and Betnikh wearing it I tend to assume they just put it on for the quest and haven't bothered to take it off yet. But I wouldn't say I think they're being idiots.

Anywhere else I'd assume the person likes how it looks and has chosen to wear it.

If anything I'm being more idiotic by having both a selection of cash shop costumes that look like regular clothes and some of the stolen clothing items clogging up my characters inventory so they can wear them occasionally while in town. (And then forgetting to swap out of the clothing into my armour, it goes in the same slots so it does affect your stats.)

reference the whole males not wearing a "traditional" (by some geographic region's standards) shirt/pant setup:

from the first time I watched lawrence of arabia - I've always wanted to rock the bedouin outfit he was wearing in that movie...

that looked so freaking cool - and, very warm weather friendly too