I think the problem lies in people using the term "formal", because that seems to be open to interpretation for a lot of people. We need to be honest; for many (maybe most) people, the only times they get anywear near a tuxedo is when they rent one for a wedding or prom, and many have no real idea what "formal" means. So, for many, that means putting on a tie.

Terms like "black tie" are better, because there is a more defined standard, although again many don't know it. The term "black tie optional" can cause all sorts of problems. Many issue the dress code wanting people to wear black tie if they have it, but not to feel left out if they don't. What ends up happening though, is guests see this as meaning that they can choose not to bother with the black tie, even if they have it.

And that brings up the next issue. Many people see dressing up as a nuissance, to be avoided if at all possible. They haven't realized the fun of being the best dressed man in the room.