I agree with you the main faux pas is trivializing things others hold sacred. Using costume to mock and make fun of any race or faith is different than wanting to embody it, which is where I think some cultural sensitivity policies sometimes mistakenly conflate. There is some nuance when it comes to historical and current power dynamics, certain costumes rooted in racism (e.g. blackface), which would be suitable justification to allow or bar certain specific costumes. However on the whole, I think ethnic cultures should be able to be expressed by anyone, when done in a positive, respectful manner.