It really depends on what kind of business you work in. I'm allowed to dress however I want, but there are some rules, for example. I have to wear professional cloches and not some kids jeans with a shirt or anything else. I don't have a problem with that at all. I think dress codes are very reasonable.With most jobs, you're required to dress for the part or be presentable of sorts, but have you ever worked for a company that allowed you to wear your own clothes and not have to get a fancy suit?
If I ran my own business with employees, I think I'd let them dress anyway they want as long as it's all appropriate.