My intuition was that what defined when to wear a knit was city vs. country. I think what you are saying is that the right criteria is actually dressy vs. casual. If that is indeed accurate (which it very well may be) then a city outfit that is casual could work with a knit. Perhaps I have the whole city/country construct wrong, I dont really feel like reading the vox thread again.
City vs. country has, in many ways, informed what we view as "dressy" and "casual," so it can be a useful guide. But not everything casual is specifically associated with the country, or needs to be worn exclusively with tweedy gear. A pheasant tie, for example, strikes me as much more country than do knits, which have been worn with city suits whenever they've enjoyed their periodic fashions.
Beyond that, few of us divide our time between our city home and our country estate these days. It gets very sticky very quickly when we too literally apply the standards of pre-WWII England to modern life. There was a time when the modern business suit was casual wear, so it's important not to become too wedded to the standards of any one period.