To answer the OP, in my opinion,
Yes, it was wrong. There was a period of time when tznius fell to the sidelines. For whatever reason, and there were plenty of them.. a lot of women and girls then were much more frum and God fearing than our generation, we are not to judge them. I think it’s only proper to photoshop, asside for tznius concerns, because many of them would be ashamed of their attire – looking back. I know of one (relative of mine) who begged to have her picture altered because a bit was too revealing.. Again, it was a trend in those days.. we cannot judge, and they wouldn’t want to “be caught”. So they photoshop.