This is a recent phenomenon in Irish dancing here( by recent I mean in the last ten years or so) and I think it actually detracts from the steps and distracts the viewer. Is this the point - to Disnify the whole experience? Is it not about the dancing talent any more? I danced until I was 14 or so, and our mothers made our dresses, white with coloured Celtic embroidery and green crotcheted collars and a green velvet jacket over the top. Now it seems to be big business.
Mind you, when we danced (before the whole Riverdance thing) it was definitely not trendy - we used to get an awful bollocking at school for having to get up at every school occasion to do Irish dancing. Yes it was a Catholic convent school! How bad is that!~ being thought uncool for doing Irish dancing at a convent school;->

Cheers!