Mario & Sonic wearing TANKTOPS?
It's because they wanted Sonic rivaling Mario's outfit, because they are both main characters in the game.
You can't Sonic's nudity using Mario since Nintendo wouldn't expose mario's nipples due to their ultimate kid-friendly policy. So they gave mario a tanktop because of the game's theme, then matched Sonic to him.
This change of style was necessary due to the olympic nature of this title, as the regular mario outfit would do nothing as an advertisement when he's showing up in the box's cover.