Brandon had a great post over at Siris the other day dealing with modesty. He rightly points out that the way in which we talk about "modest dress" in our current day and age is actually only a small subset of the issue which was traditionally discussed. Modesty was primarily discussed not in terms of being overly revealing but rather in terms of vaingloriousness. Another too-seldom-discussed point which came up for discussion, however, was the difference between moral law and moral prudence.
In our modern culture there is a great tendency to behave as if all moral questions are relative. "Well, that's not right for me, but of course for some other person in some other culture..." Christians rightly react against this and point out that certain actions are wrong in and of themselves, although someone's knowledge or culture may make them less culpable for violating such moral laws.
However, having found the moral hammer, as it were, there's a certain temptation to see every moral situation as a nail. And yet, not everything that you might advise someone not to do for moral reasons is inherently immoral. Indeed, many aren't. Many are instead morally imprudent.
I think part of what causes the confusion is that we fall into the habit of thinking of things which we tell people not to do (or which we choose not to do) as simply being bad. For instance, when I take my daughters shopping, I shoot down outfits which I consider to look sexually suggestive, whether it's by the cut and fit or by featuring phrases I consider inappropriate. (Aside from obvious things like the large "JUICY" across the bottom, the two I recall striking me as most appalling were "Sweet Tart" and "Melts In The Mouth" on snug little tween shirts.)
However, the reason I don't let them buy those clothes (whose defects at 10 and 11 they are oblivious to) is not that it would be sinful to wear those clothes, but rather because it would be imprudent. You do not have a moral obligation not to wear such clothes, and someone might very well wear them quite blamelessly, so it's important that you do not assume that someone who is not following your prudential standards is doing wrong or lacking in morals. However, that doesn't mean that it's the best choice.
Unfortunately, this idea of prudence seems to be very difficult for many people. In our liberty-based culture, people seem to want to think that either no one should do something, or else there is no reason why you shouldn't do it.