He's 3... who cares what a 3 year-old wears.
Frankly the thing that I find most worrying is fathers who have issues with their sons having gold sparkly handbags or dressing up in girls clothes.
If I had a son and he wanted a dress then I would buy him one. Why not? Who cares what anyone else thinks? I doubt another 3 year-old would bully him about it, and if they did, then that speaks more about the other child's parents - why they let him/her bully, and what they have said to make the child so prescriptive about what is normal.
The only thing I would draw the line at was if it would be inappropriate on a girl - I don't like clothes that sexualise young children.
My brother often left the house in a tutu or princess dress as a young child. He and his wife do go to parties in dressing-up clothes on a regular basis, and I believe taxi drivers have been know to raise the odd eyebrow but frankly it's very harmless.
I only have a DD, and she is a complete pink princess and only really likes dolls - and the awful pink Friends Lego (whereas DH and I really like the Hobbit sets). It's not my choice of toys, but my parents didn't force me to play with dolls and I won't force her not to.
I was not a girly girl, and while I love the old-fashioned hand-smocked peter-pan collar type dresses, the pink frills are definitely not to my taste. The only time she will wear trousers is for dance classes, otherwise it's always a dress - she doesn't like things round her waist so won't wear skirts either. As a baby DD mainly wore blue as she looked hideous in pink. She also wore dungarees or trousers up until she was able to voice her opinions on what she wore. Fights over clothes are not a battle that is worth having.
So go ahead and buy him a dress - H&M have a wide range of cheap ones that cover a broad range. TK Maxx have amazing Tudor princess dresses that beat anything Disney has, lots of tutus and loads of sparkly nylon creations.