it's not about rank at all in my opinion, or status in society...it's about having spent so much damn money, and worked so damn hard to get where you are, that you should have every reason, if not right, to be proud of what you do. i don't advocate wandering around town in your uniform on your day off! But I do think that being seen to be professional in attire is an important start to your training establishment being seen as a good place to learn. it's not even about each individual looking smart, it's about the whole 'team' looking like a team and also like they're actually qualified.
i don't have a huge problem with people who teach in casual gear, it doesn't have any bearing on their ability to teach and if you're a one-man show without a club or school that employs you then that's fine. as an instructor employed by an aero club i think it's important you all look smart, in the same way as the bank tellers all look smart.
just my opinion though