I am admittedly a bit old fashioned. But maybe this is helpful:
I used to be the director of recruitment for a program that sought out recent college grads and paid for their Master's degree in education in exchange for teaching in a poor area (the Mississippi Delta). I spent a good bit of time at college career fairs. So while I can't speak for everyone, I can tell you that I've seen quite a few college students come past my desk. And the bottom line is this:
I never once saw one who was OVERdressed. I personally never turned away an applicant for being in a suit and tie, and I've never seen one turned away for that reason. But I'll also tell you this - I have seen many an application tossed in the trash as soon as a poorly dressed applicant was facing the other direction. It DOES happen, and the reason is simple. In most cases, and especially in a tight market, employers are looking for reasons to trim the stack of resumes. They don't have time to give every resume a thorough review. So if there's something that can help weed out likely wastes of time, you can bet they'll use it.
There are probably thousands of cases of underdressed applicants getting the job, or at least being the better candidate. But why take the chance? Is it really that unpleasant?