Ordinarily I would say it's not okay for anyone to be treated like a piece of meat. However having been in and around Hollywood I understand a little bit about the casting process.
If there is an audition for a role of a hooker or a female character who uses her sex appeal to take advantage of men then having actresses show up wearing pants suits is not going to help them.
Most auditions are for lack of a better word "cattle calls". You're given a couple of sheets of (sides) aka dialogue to go over with a casting director's assistant or another actor you've never met.
If a casting director has to go the extra step of trying to "imagine" you dressed like the character (he or she) may find it too time consuming. Oftentimes if you don't "look the part" in the audition you're not going to get the part. The only exception is when a major star is being considered. That's Hollywood for you.