It dramatically increases your chances of being hired by the wrong people. I don't think it could possibly dramatically increase your chances of being hired somewhere really awesome. (Because if hiring decisions were affected by dress that much, you wouldn't have really awesome coworkers).

Dressing up can be a signal that someone is desperate for work. And failure to dress up can indicate confidence and other options.

The point is it can be a positive or negative sign, depending on various things.