Yes and no. If a soldier thinks and feels himself to be a better soldier because of the way he looks then maybe he will perform that little bit better. On the other hand as long as he has the right kit and equipment it doesn't matter what he looks like as long as he knows how to use it. He could look ally as a WWII fallschirmjager or as unally as a Royal Marine. It's mostly down to his personnel skills, his commanders and as mentioned, his kit and equipment of how he performs on the ground.
Well it certainly did with the CO of 2 PARA. After appearing on the most Ally thread on here, he was so inspired he single-handedly attacked a group of a Terry who, it appears, were in the process of laying an IED. They were so surprised by his allyness they failed to hit him with an RPG (OK, it nicked his leg which was presumeably dressed in MTP rather than Ally DPM) and bounced off his MTP Osprey.
I think it can sometimes, if a bloke has confidence in his kit he will generally perform better than someone who is constantly worrying about bits falling off or whatever. Although I think a lot of kit issues have been addressed now, there will always be people who will splash the cash on their own kit rather than wear issue gash. But as has already been said, "look good, feel good" It can breed confidence.
This type of discussion must have been doing the rounds since Roman times....I can remember being a new Tom in Battalion (back in the mid 80's) and being impressed by the senior Toms and JNCO's at first and the extent they seemed to go to, to 'look ally'. You get caught up in it and want to look the part etc. Some blokes took the piss.....others didn't really give a feck, I ended up somewhere in the middle.
I allways remember a Plt Sgt saying "if you look good (as in having all the gucci kit), you feel good"...implying you were a better soldier as a result....I was never convinced myself it didn't really make that much difference in my experience.
On Ops I would wear and carry the kit that was most suitable for the task at the time. This would inevitably result in a look that would produce a self induced semi should I have walked passed my own reflection at any time. As it was though, I found I had far too many other important things to think about than my nails appearance.
Looking ally just so you can touch yourself and to boost your ego whiffs of tubeness.