Rav Eliezer Melamed says that it depends on what are considered honorable clothes in the place. On a kibbutz shorts and work clothes are considered honorable clothes. In other places, this is not so. Rav Soloveichik rebuked rabbanm in Florida for wearing shorts. Rav Tzvi Yehuda Kook told talmidim who became rabbanim to dress in a way that would cause the public to respect them. Rambam (Hilchot Deot ch. 5) says that a talmid chacham should wear average clothes (see Shabbat 145b that over-dressing could be a cover-up).
Regarding talmidim, part of the machloket between Slobodka and Novardok involved dress. In the former, the talmidim had to dress up so that they would feel that sin was beneath their honor. In the latter, they dressed poorly in order to break their pride.