My pets would really dislike being dressed up. I do think it's for the owner's satisfaction rather than anything for the pets comfort or health.
I lived in Japan for a couple of years as a result of my husband's work, and over there it's pretty remarkable how much they love dressing up their pets. I heard from a friend (so don't quote me on accuracy) that there are significantly more pets than children in Japan, so I guess to a degree people are possibly living out that idea of dressing your child in cute outfits and instead doing that to their pets. There were seriously stores all over the place which I originally thought must have been kids clothing stores that were actually for pets. They even sold things like puppy cardigans and puppy soccer jerseys and things like that. I'd never seen anything like it.
I don't think I'd ever dress up my animals anyway - even in spite of the fact that they wouldn't like it themselves, I just don't really see it necessary. If I had a chihuahua, like someone mentioned, and lived in a super cold climate then sure, I can see the necessity in it. But my pets are indoors anyway, save for potty breaks, walks, and supervised yard time! If it was a particularly cold day I wouldn't be leaving them outside anyway just to shiver and be miserable. Also...some of those pet outfits are insanely priced! For something that doesn't benefit my pets health and well being I would call it an unnecessary expense.