There are two different federal offenses that are being conflated here: impersonating a member of the military and wearing unearned awards.
While I strongly think that both of these deceptions should be against the law (which is currently the case), if we are going to discuss the merits of the laws in question, it would be helpful to discuss the two issues separately.
Allowing people to impersonate members of our Armed Forces could have real national security implications. Just like we have laws prohibiting someone from impersonating a police officer, we have laws prohibiting people from impersonating members of the military. I would think it would be obvious why allowing this (which is what decriminalization equates to) is a bad idea. Marine Corps officer command Marines. U.S. Marines guard the President, military installations, embassies, nuclear weapons, etc. It is a really bad idea to allow fake Marine officers to be running around with impunity.
The other issue is that of wearing unearned medals. This is less of a case of having national security implications and more of a “stolen valor” issue. While I also think that this should be illegal, I will admit that this is somewhat of an emotional reaction. Allowing people to wear unearned medals debases the awards in question, just like counterfeit money debases currency.