This is a hottly debated topic on the boards pretty much all of the time, with lots varying opinions and several camps. I think it comes down to this, the dress code is not strictly enforced because it is a suggested dress code. And it seems more important to make as many guests as possible happy rather than turn them away from the dining rooms because of their dress.
After that it comes down to not letting it bother you or alter your experience. We actually like getting dress up and do the tux and gown thing on formal nights, and it doesn't dimish our enjoyment if others don't want to play. They paid for their trip to and if they don't want to follow the suggestions, so be it.
However, we do get bothered by people who are totally thoughtless about what they're wearing, either totally inappropriate attire, like see through tops or swim wear in the main dining rooms. Actually saw a family of three come into lunch at Parrot Cay in wet bathing suits and sit down to lunch. The CMs brought them towels to sit on so they didn't completly soak the chairs, not that I think that worked.
Any way, again, I think Disney tries to set a mood and tone with the suggestions, but in the end it comes down to the individual guests choice. And with tongue firmly planted in cheek, I think the suggestion is no jeans or shorts even at Parrot Cay on the last night.
