Unfortunately this is true. There are liability issues with children mistaking you for a princess, I believe. As far as I know, except for very special circumstances, you aren't allowed any sort of costume in the parks.
The only other time (other than the photoshoots) when you can wear your dress in a park is if you are having a private event such as a dessert party. When we had mine we came into Epcot from the back and were escorted to the Lower UK. It was pretty cool and during the short walk everyone cheered and clapped, some people even took pictures!