One of the interesting things about riding a bike is that there are endless ways to do it.
Currently, my stable includes two race-ready road bike (yes, they are both steel - not carbon fiber, but they are still race-worthy, damnit). These bikes only feel "right" to me with lycra and a jersey. I also have an Xtracycle errand bike that's covers the utility niche pretty nicely as well as a mountain bike outfitted with a rack, fenders and a lot of lights that's doing bad weather commuter duty. This all topped off with a nice little 650b all-arounder Rawland that seem most of the action commuting and getting around.
Typically, when I am riding anything but the road bikes, I'll wear a shell or tee shirt on top and shants or shorts on the bottom half (sometimes with bike shorts under them if the ride is going to be longer). Almost all of my bikes have SPD pedals, so that means the Sidi shoes or my Keen sandals on the feet. In other words, This all means that I generally look like I am out for a bike ride when I am on a bike ride.
Lately, however, I have been tempted by "cycle chic". This is due to spousal inspiration. My spouse has a nice Breezer "Uptown" that I picked up for her at Hiawatha awhile ago. This is a "city bike" with a Nexus 8-speed hub in back, a generator hub up front, lights fore and aft, a chain guard and fenders, not to mention a sturdy rack and built in lock. What's more, the frame is solid and it's fun to ride. She likes this bike and she looks good on it. It's also got some nice wide platform pedals - perfect for whatever you happen to be weating.
This is exactly the kind of bike a person could ride in street clothes and feel perfectly comfortable. One of my cycling goals from last year was to make the bike easily accessible. My solution then (and now) is to wear more bike-friendly clothes and to try and slow down, because I tend to push the biggest gear I can spin regardless of whether or not that makes any sense at all.
Stylish utilitarian riding can be done as evidenced by our brothers and sisters in Europe. There are a few doing this closer to home as well, and this might just be the next bicycle revolution.
I doubt I'll be wearing a suit and tie on my rides in the near-future, but you just might see me in civilian clothes at some point in the not-to-distant future.