People do weird stuff on Haloween. It's less offensive to me than dressing as a priest or nun, with the flask hidden in a bible. If it is worn in the spirit of fun, I don't see the harm but I can certainly agree with not wanting to loan out a garment. On the other hand, my husband has been known to loan kilts, and several have gone on to purchase and wear kilts. I think it's a personal decision, but I wouldn't be offended to go to a party and see a kilt wearer. I would probably just tell him how he's doing it all wrong and if he wants to wear a kilt, how to do it right.
It's the folk I see at Highland Games that are wearing some pretty strange stuff, thinking they are Celtic warriors or something that bother me. We all have our buttons.