I posted my review of Kitana's new costume in my Art thread; you can read it there, if you're interested. Short version is: I'm withholding ratings for now, but I'm quietly optimistic, and I think it works, both as fanservice and on a plot level.
Now granted, I'm a raging Kitana fanboy; she could have anything on, even a giant panda bear suit, and I'd still be fapping! So... my opinions on this matter may not be as objective and sensible as y'alls. But I really do think this costume can work - it's not the best I've seen her in, but it's far from the worst, and as controversial as this might sound, my intitial reaction has been slightly more positive than it was with her MK9 bikini (the loin cloth, hated the loin cloth, still do). Furthermore, as others have pointed out, she'll have a second costume... and a third, maybe even a fourth.
As for whether I'm getting the game: yes. Now that Kitana has been konfirmed, I will get it. I've actually been avoiding all news about this game for fear that they wouldn't bring back Kitana and I'd be getting my hopes up for absolutely nothing (this is a common pattern with me), but now that she is here, I am willing to think, talk, and even preorder this game. In fact, the only thing that is stopping me from preordering right this very minute is that it is still early, and I do not know if there are going to be store-or-console specific exclusives. All else being equal, I will get the PS3 version, since the only system I *have* is a PS3! However, if one store has a Kitana and/or Cassie centric DLC (aside- I miss Sonya, replacing her with Cassie is far more worrying to me than unsexifying Kitana's outfit), then I will buy it there. I'm also willing to buy a new system if, say, that system has an exclusive Flesh Pits Kitana model, but this is a stretch. Most likely, it will just come down to whatever retailer offers the best Kitana flavoured merchandise.