I think part of it might have to do with people having more casual workplaces.
If one only buys casual clothes for work, one may not want to invest in a new wardrobe for cruising. Years ago, workplaces were dressier, so people already had these clothes in their wardrobe.
My DH started his career in a "suit" environment. He now works in a business casual environment. So he is happy to dust off his suits and wear them on a cruise. But if those suits no longer fit him, he would probably not want to invest in new suits just for cruising.
We love to dress up - for us - pretty much every night is formal night or close to it. But I definitely see both sides.