I am also not a fan of dress codes per se. But traditionally fine dining restaurants do have them. And the one you mention is pretty straight forward that they do... per their website....

"Dress Code

Atlas Restaurant Group promotes a dining atmosphere, and the suggested dress is business casual. We kindly ask our guests to abide by these suggestions to create an enjoyable environment for all guests."

Dress codes should be applied consistently.

I am a social member of country club with a dining room dress code. No tattered jeans, t-shirts, halter tops, etc. Older members at the club in particular enjoy a more elegant dining atmosphere, in that sense, they deserve the opportunity to enjoy a more elegant setting given that a dinner will generally run $60-70 and up if any wine is involved.

However, if the dress code is not being uniformly applied that is certainly unfair. If the manager was behaving in a racist manner, then he should have been fired. But while it seems "fair" to cut younger children some slack, where do you draw the line? Sadly, in this day and age, the simplest and safest policy is "no exceptions".