What the question your wife is begging is whether most most of it is about people getting their rocks off on the 'wrongness' and inappropriateness of it all.
And, for those people who do (the 'sissies' - see
this thread for an example of what I mean), they'd probably completely lose interest in it, since no one would care anymore. Their fetishization of it all is hinged on people finding it inappropriate and 'wrong.' They get off on the 'humiliation' effect of doing what they do and that would cease to exist.
But, I do not believe they're anything more than an extreme minority of the community.
That being said, I think a lot more people would just dress as they care to.
Most people (including I) would be completely full-time, which is a stark contrast to never being out and never caring to be out due to the consequences, my entire life.
I (and many people here, I presume), have always had to make efforts to make myself come off as more masculine than I really am and it would be a relief to just 'be myself', so I'd just do that.