If possible, people who are dressed improperly for Mass should be spoken to by the priest, a deacon or some other person of authority before Mass.
If not, then those people (assuming they have confessed) might be permitted to receive, but they should be addressed in a meeting by the priest as soon as possible.
One of the biggest drawbacks to the defense of Tradition is that so many people are eager for the true Mass that they forget ALL the other really necessary things that go along with having a truly Catholic parish, things like spiritual formation, getting to know one's Father and vice versa.
Too often, people are disconnected from their parish priests except for confession and Mass.
Back to the original point: If, however, someone were truly SCANDALOUSLY dressed, and not just in the wrong thing (i.e. short-shorts as opposed to loose linen pants on a ladies' suit), then they should be denied at that Mass and not permitted to return until proper effort to instruct has been made and proper amendment of their attitude has been demonstrated.
We should ALL be careful, however, to distinguish between people in jeans or other common work/street clothing because they are POOR and those who routinely wear nothing else because it's "stylish".
At many thrift stores near me, there are FAR more jeans and t-shirts for sale than anything resembling decent, respectable clothing. Even the suits and pants that are there are often hopelessly outdated in style and would likely cause embarrassment to the wearer who would stand out as having no other choice.