I think it's perfect OP.
My DD wore a very similar dress at her 4th birthday. She loved it, it washed well she wore it a lot afterwards and it is now stored away in the attic with all the other sentimental clothing- now that my DD is 24.
I think it is important to allow some say in what they wear. Even a 2 year old can choose which socks they would like to wear.
My mother was very strict with my clothing, and it felt very undermining.
No red ( the colour of harlots- and yes she would tell me that when I was 6 ).
No yellow- made me look sallow and jaundiced.
No short sleeves because my arms were too skinny and ugly.
My DD remembers when I said yes to the dress she chose- similar price, and she was so happy. As long as clothing fits criteria for children- price, suitability, warmth, duirability etc. then there is no bad choice