Should the dress stay?

I bought this dress at Target this summer, wore it once, then saw a picture of me in it and immediately wanted to throw it out. I think I deleted the full-length version of this picture, so here's the cropped one.

I guess it doesn't look that bad. Something about it just turned me off when I first saw the picture, though. For one, I don't think I look good in sleeveless. Also, the stripes make me look wider (which, duh, what was I expecting?), which is more noticeable in the pictures below.

Before getting rid of the dress, I decided as a last-ditch effort to change the outfit and see if it worked better. I added a belt and cardigan and actually got complements on it. I definitely like this better, but the dress is pretty short and still has the widening problem, making it harder for me to keep. It's super comfortable, though.

Should I keep the dress? Which look do you like better? I think a lot of people bought it this year - do you have it?

P.S. The belt is one of the New York & Company colored patent belts I recommended in this Style All Over post.