Yup, so long as it's policy, and not arbitrary, this makes sense to me.
I needed to sign a Code of Conduct when I was hired; it covered things like this. (would imagine this guy did, too, it's pretty standard) Of course, the Code was pretty vague, "Business-Appropriate Attire" or some such. But then again, my company keeps me locked away in the basement far away from customers. If I was public-facing, I'd bet that my guidelines would be more specific.
I was right. The public-facing employees in my company - think Sales, Client Services, and so on - have *very* specific guidelines on what can and can't be worn.
Further, it explains that the employees should be cognizant of what's worn on site with the clients. For instance, if business attire at a site is jeans and T-shirts, don't show up to work there in a 3-piece suit. Or, if the client is (for a poor example) "Armani", don't wear "Gucci".
I didn't pay much attention to this policy as it didn't affect me, really. It's pretty thorough. Makes sense, heads off issues like this one.