No one should smell, or shout on their cell. Or wear items that are inherently offensive (for example containing graphic images or slogans which are illegal).
But the problem with 'smart casual', as opposed to 'clean causal' is that Robert Mugabe and Kim Jong-Un get lounge access, while Gandhi is told to take a hike.
You can't avoid someone smelling or shouting (so we could ask them to have a wash or quieten down), but we can examine our own rationale in cases where we feel someone is not dressed to our standard because our standard may no longer be reasonable. Why do we want to control someone else?
If someone wants to turn up in the lounge wearing PJs I might think 'oh, good idea, why didn't I think of that?', or I might think 'nah, not for me'. But I'm not going to bar the person from the lounge because they have chosen to wear something I personally wouldn't.
As I mentioned earlier... the publicity surrounding this seemed to be very well timed with a membership drive!
im quite sure Gandhi could not get in the lounge:
http://upload.wikimedia.org/wikipedia/commons/e/e5/Gandhi_costume.jpg
What he wore in his later life is the traditional clothing in his country and the social norm for his culture, if we lived in India, entertaining an Indian lounge, we could dress like that and gain access. Similarly in most Middle East countries, traditional wear is allowed in lieu of smart casual.
I find it remarkable that is so hard to understand for some people, seeing others dress in a certain way is just as disrespectful as swearing like a sailor. Personally I don't mind at all people using foul language, in fact I'm a huge fan of George Carlin, but would I swear in public? No, because even though this is not offensive to me, I understand it is to a significant subset of fellow PAX.
Equally, as proven by the polls and general opinion, a significant subset of people, if not the great majority, find singlets, thongs and beachwear to be inappropriate and disrespectful to wear in a lounge.
Now, as to the argument "it's ok in the plane therefore is ok in the lounge".
Two key issues with this line of reasoning, it's also ok to smell like a Neanderthal in a plane, to my knowledge no rule stops this, albeit there should. I literally almost passed out of asphyxiation once on a trip to BNE, good thing the crew allowed me to swap seats.
Secondly, just because you can do it doesn't mean you should, pyjamas in the plane (as long as they are long such as the ones provided by QF) is perfectly ok on overnight flights as you are going to sleep in a cabin. See the difference?
similarly if I were to sleep over in a friends house I would not show up wearing pyjamas for dinner, I would change clothes when the time to sleep arrives.
I will leave it there as I don't think this particular dead horse can bear another fresh beating, I just urge you to look at the facts with an open mind, and you may find is not just a group of conservative puritans or fashion police, but just trying to make a minimal effort to dress, act and behave respectfully, that's all.