It's just the jarring contrast. You give heavy armour to an elf and it transforms into a bikini.
It bothers me more that the same armour would fit a slight elf, a burly human, a short dwarf and an entirely differently-shaped lizard. It's not like IRL I can buy size 10 clothes and fit into them, after all.
So if they'd have to be altered for fitting both size and anatomy they may as well be altered for the character type's aesthetic preference too. There's a magic, invisible armourer and tailor shop that follows your team around to provide this special service free of charge. :p
