Dress like a local--or rather not?

One nice aspect of travel is of course to admire the colorful local garments worn by women and men. Vibrant hues, shimmering fabrics, lace, flowers, elaborate gold ornaments, at the sight of all this abundance, the temptation is there to slip into the role of local. However, there is a fine line between blending in and making a fool of oneself. Of course, many of the most elaborate costumes are only worn on special occasions and celebrations anyway, so they are definitely out. But what about everyday wear like kimonos, saris, dirndls and, yes, Lederhosen?? Would or should you as a clearly Western woman don a kimono and cloggs and go shopping in broad daylight in Tokyo's Ginza? Should you squeeze yourself into the thight bodice of a dirndl and stroll across the Viktualienmarkt in Munich if you happen to hail from Ghana? Or are Lederhosen ok for a gentleman from Japan who enjoys a Mass or five at the Oktoberfest? I think not. The exception are, for woman, Arabic countries where they have to cover up. Saris and kimonos could be ok for evening wear if you are not a local. Headscarves, long sleeved blouses and baggy pants are often worn (and expected) by women who are engaged or married to a Turkish man. And the Lederhosen best fit the muscular bodies of the local lads. For fun I tried on the antique caftan you see in the picture. I couldn't have left the shop with it anyway, the price was skyhigh. Any opinons about the subject would be much appreciated.