It's really about comfort, efficiency, and practicality. Anyone who rides much will benefit greatly from the right clothing.
Under about 20 miles you can wear just about anything. But if you ride every day it makes a difference in comfort. If you throw in a couple of long rides on the weekend you may need the right clothing to keep on going.
Much over 20 miles a proper chamois will make a big difference. After 60 miles you really need a chamois.
If you don't ride much a 60 mile ride in jeans could hurt big time. To do a century you need the right stuff.
I do one 100 plus mile ride a week and about 75 more miles every week. You really don't want to ride a 100 mile ride without bike specific clothing. It will take you a few days to recover from your injuries to your skin where you sit. If you can even go that far without them. The tights flex and do not slide and chafe your knees and other parts like non stretch clothing. You even get more power when you don't have to scrape your jeans over you knees every time you pedal. Some tights have a wind and waterproof front and a breathable back. Small things make a big difference if you go on one long ride, or if you ride every day a lot. It can be the difference between even being possible or not.
The shoes keep your feet feeling OK and increase your power. If you have to carry anything in your pockets, you need a Jersey. Front pockets will chafe and stick into you when you bend over. Etc. etc. etc.
A rider with enough experience knows it has nothing to do with looks. I wear the plainest bike clothes I can find, but I need them. I think they look funny, but I don't care any more. All the right gear just allowed me a comfortable 3 hour ride in the snow in 15 degree temps. Very comfortable.
The bright colors are so that the cars can see you, not fashion. I wear a bright yellow windbreaker on the road all the time. I don't like yellow. I'm used to it now.
That being said some riders don't know any better and just copy what they see, or really do try to have a certain look. But they are copying something that works better than they know.
I repeat, under about 20 miles it does not matter very much. On short rides I don't always wear bike clothing. It depends on what you do. There's a lot more to it, but this post is long enough.