The costumes were spot on.
I disagree strongly with this statement for reasons that are rather obscure to anyone who is not a comics nerd - but Watchmen has a lot that's for comics nerds anyway, so I feel justified in this.
In the comic, almost all the "current" characters' costumes are mid-lateish 70s-styled designs at the latest (Nite-Owl, who has strong elements of Neal Adams Batman). They're dated, and that's deliberate since the costumed heroes haven't been active since then. The exceptions are Ozymandias, who has kept up the kind of minor design changes that happen over time with a given superhero's costume, and the Comedian, who has an extremely 80s comics design for his 80s costume - and a 40s design for his 40s costume (like the rest of the 40s characters), and.. well, his 70s costume is just a gimp mask, I got nothing there. It is one of many touches that establish the masked hero as a dated phenomenon and the characters as being, to varying degrees, stuck to their pasts.
In the movie, the costume designs are aggressively slick in a very 00s way, to the point that I found them jarring in a setting otherwise trying very hard to establish an alternate 1980s. Yes, this kind of design looks less "silly" - but a grown man dressing up as an owl is
supposed to feel a bit silly, notwithstanding that his owl-suit is full of very serious and dangerous toys.
Also, Ozymandias's outfit just looked.. really bad. Gold-spraypainted plastic is not regal, and being able to survive close-range small-arms fire is a little less awe-inspiring when the character is wearing a very clearly armored suit.