Question: Why it is necessary that the cloth of the Ihram should be such that is not worn usually and should be unstitched?
Answer: Hajj is a social worship, which should be performed with complete independence. To keep this purpose in mind during Hajj wearing of a two piece of cloth’s is enough, and prohibition of wearing casuals and formal dresses is there because they are distinguishing and create differences and sometimes are signs of pride and show-off and thus this desire of the human beings has come out practically, that one day the human beings will have to remove all the factors of pride and show off.
In other words, Hajj in the eyes of Allah is the best way of showing that human beings are equal and thus it is necessary to remain aloof from all the formal and casual clothes, due to which differences arise and they should wear two pieces of clothes and all people should look alike in this grand ritual.
source : http://www.maaref-foundation.com