I wouldn't dress my pets up because it seems absurd based on their personalities, it's a whole lot of effort and handling for no good reason, and snobbishly, it's just a bit twee and Paris Hilton.
But, playing devil's advocate, why is this so much more wrong than dressing up a human baby (who likewise doesn't have much say) in a costume some people will think is cute? Animals, at least, won't be embarrassed by the photos when they're older.
Unlike feeding an animal wrongly or keeping them in dirty or cramped conditions, dislike of dressing animals up is more about humans' personal beliefs and / or aesthetics. The dressing up, whilst rather undignified and silly, doesn't in general, seem intrinsically harmful to animals' health.