Oh my god this combo has my heart.
Yes and no. Let's first bear in mind that wa-lolita is a street style created by the Japanese themselves. It was not made by Westerners who wanted to appropriate the kimono and it's not a piece of traditional clothing, no matter how much influence it draws from traditional styles. However, the style we're talking about is still a Japanese street style, just like the style it came out of, lolita. In a way all non-Japanese lolitas of all kinds are already borrowing from another culture's clothing style but of course, the lolita style itself has been appropriated from another culture to begin with (and in fact so is the kimono).
An important point whenever looking at such cultural interaction is to remember the level of formality. Is the outfit something everyone can wear in the country of origin, or does it have limits? Icelandic sweaters are for anyone but the national costume is not, regardless of the fact that both items of clothing carry heavy cultural value. The difference lies in that the national costume is one of the most formal outfits this country has while the sweater is an everyday piece of clothing, nowadays even worn by young people who have added it to various street styles.
Street styles are just fashion and fashion comes and goes as opposed to traditional clothes that have a cemented part in the culture they rise from. Wa-lolita is an extremely marginal style even in Japan and it clearly isn't accepted as formal wear there, so I don't think a foreigner wearing it is any more offensive than a Japanese person wearing the same thing, which means that yes, both Japanese and foreign lolitas are equally capable of wearing it offensively if they disregard their surroundings.
Very basic but quite alright! In fact basic designs are your friend when it comes to wa, less is more etc.
Think of it as f.ex. a guest wearing a long white dress to somebody else's wedding: the dress itself may not be offensive but the fact that it's flaunted at a wrong place and at the wrong time certainly is. Street wear, likewise, belongs in its own area - the "street" iow the most informal situations of them all. Hanging out with friends downtown? Lolita ok! Going to a convention? Lolita ok! Going to a wedding? Be sure you know the bride's opinion first. And for heaven's sake don't go wearing shiro.
Another example: going to a private gathering? A non-glamorous lolita look most likely ok! Wait, is the host Japanese? Make sure you know their opinion on lolita first.* There's going to be a tea ceremony? Don't even think of going in lolita and LEAST of all in a showy style, such as wa-lolita. It's politeness code that matters again: the tea ceremony host might even be a lolita herself but the etiquette of a tea ceremony dictates simple, toned down clothes.
I can't even begin to list everything that's wrong with this one. At least it's not a miniskirt...
You often hear the phrase "...as long as it's worn respectfully" in context with any kimono look, but I think it's safe to say that this applies to any clothes you ever choose. Even a t-shirt can be worn disrespectfully, as Britney Spears illustrated by first receiving a rare, collectible tour t-shirt and then having it cut up so that it was deemed "sexy" enough for the stage. Let's note though that the band itself did not seem half as insulted by this as their fanbase was. :D But yeah, respectfully, what does that mean? In my opinion the best way to explain the idea is "by wearing it the way it's supposed to be worn". Don't make changes in it that the people who it belongs to would not do, and when you do see them change it, make sure you know why that is.
Keeping the Japanese clothes as my example point, a visual kei band might wear kimono related items pulled off the shoulder or way too short and at one point it seemed to be quite popular. This does not mean that anyone could do the same though, it's the style of that particular group and they carry it with both the good and the bad that comes with it, and possibly would not wear it as their daily style. You can also be sure that it's not acceptable as a look to anyone save for the people who are into it already, meaning a tiny percentage of Japanese people as a whole.
The parasol does not help.
When it comes to wa-lolita, wearing it respectfully means very much the same as "doing lolita right". Don't oversexualize it, lolita is a modest style and wa-lolita is no exception. Don't just chop a yukata in half and call it a day, any lolita look needs to be well coordinated and thought-of. Do the make-up, do the hair. Don't just pepper the outfit with random Japanese items, thinking that that makes it more wa - you don't turn a sweet style to gothic by adding a cross and a black coffin purse, or think that adding a whopload of pastel hairpins to a classic look makes it insta-OTT sweet either.
The fact that you buy something online that's titled "wa-lolita" does not mean you actually purchased a wa-lolita outfit, any more than buying a dress titled "lolita" gets you a beautiful lolita dress. Just think of Blllanoooo (the company that shall not be named). No lolita style should look cheap, and again wa-lolita is no exception.
Not too shabby at all! Now if only that obi looked less frumpy...
The only time you should carefully consider how to wear the wa-aspect of your outfit respectfully is when you look at the kimono influence in it. A magic trick for getting it to look correct is in the obi: wear a good one that looks like, or is, an actual obi. Don't just drape a scarf around your midsection, and don't accentuate your waist. Rather try tying your breasts down a bit and padding your waist, and consider buying an obi-ita if you can so that the obi sits flat. The obi doesn't have to be an expensive one,** as long as it actually looks like an obi you're safe. For example, a tsuke/tsukuri obi is a perfect choice. They're very informal, often worn with yukatas, easy to put on, easy to make look tidy and completely in line with the formality level of a wa-lolita outfit (= very informal by kimono standards).
In short wa-lolita is cultural "appropriation" in a way, but a way that goes to both directions: it's a style taking influence of another culture and then mixing the influence of its own culture with it to create a substyle. I would actually rather call it cultural interaction, because claiming that someone's culture was taken away or mocked by the fashion becoming popular outside of the country of its origin sounds absolutely redundant. Wearing wa-lolita is ok no matter where you're from. The only problems lie in how you wear it, when and where: always take in the situation first, and if you deem it suitable for such a showy and informal style, go for it!
*This does not mean that the people of all other ethnicities are totally cool with lolita, just saying that as a Westerner, classic lolita style fits within our culture so well that it's considered appropriate look for, yes, even weddings as long as it doesn't outshine the bride.
**I just realized that I probably don't need to feel too concerned when talking to a (mostly) lolita audience about the cost of clothes lol.