It's just a dance costume. I seriously doubt they wear then in any other context. My kids didn't and never wanted to.
I see what you and syrenn are saying, and it is what it is. You may see nothing particularly sexy about it, but you're not a predator. I'm not one of those paranoid wrap your kids in cotton moms, imagining a pedo lurking around every corner just waiting to snatch my kiddos. But you won't see my daughter at an event that's a sicko magnet dressed like that either. She can dress up and play rock star in her own bedroom if that's what she wants to do. And she can dance perfectly well in something that covers her belly button.
I hear ya sister.
I guess I'm a big old prude because I don't think we should be sexualizing our children at age 7.
The kids might enjoy playing dress up and getting the attention, I doubt they see it as sexual at that age. My own kids are about that age. They're still pretty innocent, and playing dress up and pretending is fun in its own right without any sexuality attached. But they can do it at home. I have a problem with dressing them up and parading them on stage at events that might as well have been set up for the pervs' benefit. But it's not my call, you just won't see my kid doing it.