Cue: "But you can't deny Captain, that you're still a dangerous, savage child race."
I have never been in the military. If I wear a military uniform, it is a costume, since I have not earned the right to wear it as a uniform. Q obviously had not earned that right either, so maybe thats why Picard calls it a "costume" in that instance.
Picard: 'Most certainly I deny it. I agree what we still were when humans wore costumes like that four hundred years ago."
Problem with that siskokid888 is Picard isn't referring to Q in the uniform as wearing a costume, he is obviously referring to the military uniform itself
as a costume.