I go to the theater at least every other week, often much more. It's no longer a special event. Sometimes, if my companions are likely to dress up or if I feel like it, I will as well. I normally wear dress shirts on a daily basis anyways. But more often than not, I'll wear jeans.
If you buy into the glitz and the glamor of the theater - and sometimes I do as well - then go ahead, dress up. But there are more class barriers than most of us would like to admit in attending the theater. Tickets are already expensive, marketing for regional theaters often caters to the educated elite, and the stereotypical audience member is elderly and white. As a college-aged student, I've met many young people who've said they haven't attended a play before, or haven't done so since high school, when they were probably dragged on an English class field trip. I imagine many view theater as too expensive, too intellectual, too snobbish, too old-fashioned.
I don't say this to sound pessimistic about the state of the art - Hamilton shows that youth are capable of being passionate and excited by theater - only to say that theater as a "special event" implies one can't or shouldn't attend regularly. And yet everyone who bemoans casual dress also bemoans that theater is no longer the mass art form it once was. Surely we can all agree that both regional and Broadway houses would be a lot healthier, financially and artistically, if they were more accessible to a wider audience. Right now, trips to the theater are a twice-yearly splurge for middle class couples. Pricing is the main issue, but implicit dress codes play a part.
I expect my fellow audience members to be clean, pleasant smelling, and dressed within normal bounds of modesty. I ask that they try their best not to obstruct my view. I hope they turn off their phones, stop talking, and save their snacks for intermission. But I really don't give a damn what's on their T-shirt.