Why conversations about modesty stink...
Often times, the conversation revolves around a certain sexist notion that the way women dress leads men to sin. While it is true that the way we dress can lead to scandal and even sin, the culpability is often times limited by ignorance of what is appropriate and cultural norms. It is unfair to lay the blame on just the ladies when the men lack self-control and custody of the eyes to avert their attention elsewhere. There is plenty of blame to go around, and the way men dress can be just as problematic.
Furthermore, the way we dress is usually based on cultural norms. Therefore, when we visit other non-Western cultures, the way we dress can be an obstacle for other people. The point is simply to not be an obstacle for other people or even for ourselves. We are not meant to be obstacles, but rather we ought to conduce the salvation of others.
The question is whether there is a virtue and vice that pertains to our outward apparel. St. Thomas Aquinas roots the virtue of modesty in honesty. That is to say, that the inverse of modesty, immodesty, is rooted in dishonesty. But for our purposes we are not going to focus on the vice. If we are asking, "How low can my neckline plunge?" we have already failed. The right question to ask is, "How can I dress to conduce others to salvation?" Ok, I agree it is a little ridiculous to ask that question every time I get dressed. The point is that we should not be thinking about what we can get away with. We should be looking for what is good and true and charitable.
What modesty is and isn't...
First of all, the most basic purpose of clothing is simply to cover the body. There are all sorts of reasons that the body needs covered, e.g. protection from the elements, support, utility, etc... If the primary purpose is to cover, then we need to ask how much or how little is necessary. Necessity is essential, and prevents us from falling into victorian prudery. It is just as absurd to wear a speedo as it is to wear a wet suit to go swimming at a pool party, to wear a speedo to go scuba diving in Alaska as it is a wet suit to race the 100m butterfly.
I think that these examples help to bring out the basic notions of necessity, moderation, and honesty. Focusing on moderation, it is important to keep in mind that moderation must be understood in the context of local customs. In a sense, all I am saying is, "When in Rome, do as the Romans." If you were to wear a loincloth and nothing but a loincloth to the Vatican, you will be causing quite the scandal. If, however, you were to wear a loincloth in Sri Lanka to work in the paddy fields, you would not be causing scandal. Moreover, to wear a kings robe to work the same paddy fields would be immoderate. The immoderation comes from the lack of harmony between what is generally acceptable and what would be considered unacceptable for the purpose of the work.
There is another kind of immoderation that arises from an inordinate attachment to the pleasure effected by the use of apparel. The inordinate attachment occurs in three different ways. First, people seek praise from excessive attention to the way they dress. Everyone wants to look good, but spending an excess of time for the purpose of attracting attention and garnering compliments is inordinate and immoderate. Secondly, the attachment can arise from the sensuous pleasure from the excessive attention to apparel. Spending an excess of time or money to make clothing more comfortable than what's necessary for the task or purpose of the clothing is also immoderate. Thirdly, the immoderation can arise from a fascination with the look of the apparel itself.
There are three virtues and maybe principles that combat the immoderate attachment. The virtue of humility combats the attachment to vainglory; contentment combats a desire for excessive comfort; and simplicity combats the excessive fascination with the appearance of the apparel. Immoderation does not arise solely from excess. Neglect and deficiency can be just as immoderate.
It is a matter of immoderation to allow your attire to become soiled or tattered because of neglect or laziness. It can be immoderate to wear that favorite old shirt for the sake of comfort when the shirt attracts undesirable attention. In another way, intentionally dressing in a way that appears neglectful so as to attract attention is immoderate, e.g. to gain sympathy.
The fact of the matter is that we do not dress one way or another according to the dictates of our nature. It belongs to our nature as rational beings to moderate the way we dress. I think that if we follow these principles of how to dress we will do all right. Dress with humility, simplicity, honesty, and contentment., and do not forget to take care of your attire.