OP YANBU. The parents who laughed were rude and ill-mannered. If my 4 yr old DS wanted to go on the school run in an Elsa dress I would have let him too. Who on earth has to be so controlling of a 4 year old child that they dictate everything they wear (weather permitting)? They will have plenty of years ahead of them as an adult probably wearing suits/uniforms - if they can't be themselves at this age, when can they be?
Some of the posts on this thread are really nasty and judgemental. Reading through this thread I felt like I was in a time-warp and back in the 1950s....
FWIW for those who say 'only on Mumsnet' this is what happens where I live:
My 3 yr old DD often wears fancy dress on the school run - I am gobsmacked people think fancy dress is not 'suitable outside clothing' - are we in Victorian times? She is particularly fond of wearing it with her blonde Elsa wig. She does get quite a few comments, always positive though.
There is a boy in DSs class at primary school who often wears dresses, particularly to parties or the school disco. It is unusual I will give you that, but as others have said we do not know the reasons why he does this, whether he just likes it, or if it's another reason, and to be honest its none of my business. No-one would point or laugh and I would think they were incredibly ill-mannered to do so.
'The Boy in the Dress' by David Walliams is a popular dressing-up choice on World Book Day, in fact my friend's 9 yr old son borrowed my daughter's dress to wear for this (with football boots) :-) he looked great and he got a few jokey comments from his mates, but no-one 'curled their lip' (what an unpleasant image that is)
Our school male caretakers also like dressing up, and on World Book Day one came as Goldilocks in a blonde wig, the other was dressed as another female fairytale character. Everyone thought it was fun not weird.
As for 'men in dresses at the school gate being stared at' - at our school we have a dad who wears a Muslim thobe I think it is called (the long loose ankle length dress) - does that make some of the posters on here uncomfortable too?
As for girls wearing boys fancy dress being stared at, what rubbish - I was at a 4 year old twins birthday party recently and one girl was Elsa and the other Spiderman. They both looked great.
I could give plenty more examples like this but you probably get the picture. I am really glad I live where I do where people are accepting of each other and not judgemental or restricted by 'cultural norms'. No, it's not Brighton or LA by the way.