While wizardly clothing tends, in Harry Potter, to be rather more bright and colorful than those of Muggles, that's modern day Muggles. Back in the day -- that is, before Perkin's Mauve inaugurated the synthetic dye industry -- colorful clothes were highly regarded even if affordable only by the rich. (Or legally permitted only to the upper classes. We have records of peasant revolts including the right to wear red among their demands.)
This included the era before wizards broke off. Since then, synthetic dyes came in, leading to color being regarded as cheap in both senses. Perhaps it's wearing off by now.
I wonder if wizards always found it easy to dye clothes in bright and fast colors -- except, of course, for its potential to betray them as wizards. Perhaps they took to brilliant color as a sign of their new freedom.