In my personal opinion, animals do not look any better wearing clothes and I do not really understand why someone would make them wear clothes. However, I do not believe that making your pet wear clothes is cruel unless you make them wear clothes in extreme situations.
For example, if you were to make your dog wear heavy wool clothes and then take them outside when its very hot outside, I would see that as cruel. However, in the other extreme, clothes can help sometimes, if you are taking your dog into very cold temperatures, maybe giving them some clothes could help keep them warmer and more comfortable. And also there is another extreme of making your dog wear a ridiculous amount of clothes for the sake of 'fashion' or entering them in contests.
However, in the general case, making your pet where clothes is often unnecessary and not a good use of time, regardless of whether or not it seems like a good idea or something which you should be doing.