Well, here's what I think. I don't think kids really start caring about what they wear until they are age 4 or so, and up to that age, it's the parent's choice what they wear. But once they start having an opinion, I think it is the kid's choice. (Keep in mind I am only talking about my parenting philosophy for my family; not anyone else's kids!)
I believe in freedom-of-expression rights for children, even if I do not agree with what they want to express. A choice of clothing is one way people express themselves. If I can afford a particular item of clothing that dd wants, I think I should buy it for her. It can be said that little girls don't really want to dress that way, but if dd is pointing to something and says "I want that" then to me it says she wants that.
What I don't like, though, is the way little girls' clothes - the sexy and non-sexy ones - are made of really cheap non-durable fabric. Also, sometimes the clothes are not comfortable. I have the kind of body people normally like to display in string bikinis but I cannot bear to wear one because they are so uncomfortable and impractical! I really wish I could find one that works, though. I can just imagine how uncomfortable a 2-year-old would be in one of those. And the shoes - they are all so narrow! I buy wide sizes for dd so she doesn't grow up with the typical foot of the American female - narrow and scrunched. Her feet are square and wide, and I think that's the way they are supposed to be - not pointy!
Flimsy clothes are not good for playing in mud and rolling in the grass. I want to encourage these activities. One way I do this is by buying boys' clothes, which is an option for anyone here. They will be more comfortable and longer-lasting. And I get all kinds of comments about my "long-haired son!"
And also, if I don't want my dd to do something I should not do it either. If I don't want her eating candy, I don't eat it myself. So if I don't want her dressing like me, I have to stop dressing that way. Of course a girl is going to want to look like Mommy.
I read one Dear Abby that cautioned against sexy clothes for children in case "there is a 'funny uncle' around." Uh, sorry, but if a "funny uncle" is around, you child is not safe, no matter what she wears. She could wear a burqa and still the uncle would be "funny."
Anyway...that's what I think. I just wanted to make a pitch for dressing girls in boys' clothes. Does anyone else do this?