Orc haute couture

[Legate of Amon Lanc]

I think the "environmental protection" is an argument, even in the general sense that some clothing is better than no clothing when it comes to protection even from, say, thorny bushes. And the psychological effect, like what Zil said... and as it was also mentioned, at least since the invention of armor the clothes were a necessity. You can't really wear an armor on bare body (or you can, but that will effectively kill you).

Also, clothes can serve as distinguishing marks - "we are Cool Clan XY, wearing the symbol of a dragon on our chest", stuff like that. Also "I am the chieftain, I can wear the coolest and most intimidating armor of all; Elves, fear me; yes, it was me who killed your grandfather, surely you have heard the tales about the big Orc clad in big black-and-red-striped cloak, mwahaha".

And in the battle, generally, clothes also can be important for distinction, if they have the coat of arms (although everyone will most likely know which side the Orcs fight on, even without the coat of arms - but maybe when it comes to clash between two different Orc tribes... think of Gorbag's Dead-moon-symbol Morgul Orcs and Shagrat's Red Eye Orcs of Cirith Ungol).

EDIT: x-ed with Zil and alatar