Blair's beau Chuck has just suffered a personal reversal. He doesn't want to see her, but she sneaks in to comfort him. She's dressed as a "stripper Pocahontas" to seduce him and make him forget his woes.
They exchange these lines:
CHUCK: I always thought of myself more as a John Rolfe kind of man.
But the show fails by not having anyone rebuke her for behavior. By treating it as normal and acceptable, the show makes it normal and acceptable. If a sophisticated socialite can wear this kind of outfit, viewers will think, doing so must be okay for everyone.
Note that Blair makes what we've been saying about these stunts explicit. Namely, that women don't dress up as sexy Indian maidens to honor Natives or Native culture. It's all about using the idea of an exotic "other" as a tool of seduction. In other words, it's about using Native women as sex objects for male gratification.
For more on the subject, see:
Crystle Lightning = Maria Tallchief?
Tasteless Thanksgiving party promotions
Drink's "Sexy Pilgrim & Indian Party"
, Hooters' "Cowgirls and Indians" promotion
Victoria's Secret model in a headdress