Actually, I feel like in China there has been a great move towards westernization, and the government and a good number of people have taken an attitude to out with the old and in with the new. I speak from my own opinion from what I've observed at least. But there is definitely a great deal of momentum towards getting rid of the old and bringing in the new. I feel like it's more of a Western perspective that we find it so important that a cultural identity is to be preserved. No one I know in china is particularly sentimental about historical areas...
In fact, everything is already so ridiculously commercialized compared to even ten years ago. And there's been a huge move to get rid of the old and replace it with new, so really I don't think think there is much offense taken to having a fashion show on the Great Wall. Just generally speaking, China isn't as sensitive about its history as the rest of the world seems to be.
On topic though, it is a gorgeous venue. The Great Wall is usually so crowded that it never looks anywhere as nice.