How about 'no, you can't wear a princess outfit outside of the home because it's not suitable clothing for the school run?'
Or would some of you let children wear jeans to weddings and funerals, princess dresses to school?
Clothing is important in society: when we actually boil it down it is silly as there is no 'reason' why informal clothing in formal settings isn't appropriate - it isn't hurting anyone, nor is walking around naked - but it's considered inappropriate and is frowned upon.
One of the biggest challenges I face as a parent is explaining sometimes silly societal rules to children, but I do, because to be frank here - I want them to fit in. I don't want them to be laughed at (as small children) jeered at (as adolescents) and judged and avoided as adults.
If, once those rules are understood, a person decides to flout them, I am fully supportive of that if it is an integral part of who they are. But that understanding can only come with age and maturity. As a parent, allowing your 4 year old sons to run around dressed as Tinkerbell or Elsa, is setting them up to be a pantomime dame, to be a figure of fun.
There's nothing 'wrong' with it. There's nothing 'wrong' with wearing a Nirvana t-shirt to a funeral, it isn't hurting anyone, nothing 'wrong' with going to work in a bikini - ditto - nothing 'wrong' with jeans at a wedding. It just isn't considered appropriate and would be frowned upon. Pretending these unwritten rules of society don't exist - or rather, scorning them and aggressively challenging them with "would you have the same reaction if - ?" - "what's wrong with a small boy wanting to be Elsa?" - completely misses the point that as someone saliently explained, men in women's wear is considered a 'joke.' As such, if you don't mind your son being a joke, and if he doesn't mind - go for it - but 4 year olds don't generally have such an advanced sense of humour and would, in all likelihood, get upset. I think setting them up for that under the guise of 'I am a GOOD parent because I allow my son to be HAPPY,' is bizarre.
My daughter would be happy if she never wore clothes, ate ice cream all day and got to yank the cats tail to her hearts content. She is gently steered away from choices that could harm her and encouraged to do things that do not. Incidentally, she will never be dressing as Elsa, Tinkerbell or anything other than a toddler on the school run!