The problem is, people who know nothing about the IT industry will prefer techs in suits, and people who are knowledgable will have the same response as you did to the guy in the suit and tie.

Years ago one of the muckitymucks in my company went down to the Silicon Valley to try to sell a videogame concept. He went to the offices at all the big game development companies and at the end of the trip one of the people there mentioned to him that they can always tell a salesperson by their corporate drag.

I would say dress up when you know you're meeting with a suit person, and dress as you like at other times. Or if that's not possible, straddle the fence by being stylish and bold.