I thought Tifa's outfit in FFVII was poorly thought out, especially as it creates some disonance between her look and personality. To this day, many people judge her solely by her appearance. A simple tweak could have saved it though: either swap in baggy pants or a jacket and it would look much better. At least her AC outfit was a big improvement.
But FFX and FFX-2 take the prize in the most ridiculous outfits. Nooj has already been mentioned, but a lot of the dresspheres are also awful. For me the Thief outfit is the worst, and of course we have to look at it in all the cutsecenes with Rikku. Her outfits were much more flattering in FFX.