Although Mr. Peggotty doesn't think badly of Emily for her actions, his reaction to the children he encounters on his journey suggests that he does buy into certain ideas about fallen women. The only thing that actually bars Emily from marriage and family life going forward is social prejudice, but the weight of that convention is so overwhelming that it causes Mr. Peggotty to mourn for the children Emily won't have as though she has actually died. It's also interesting that he carries a "country dress" with him so that he can immediately reclothe Emily as a working-class woman when he sees her. To some extent, Mr. Peggotty seems to see his niece's social rise as shameful in and of itself, whether because working-class ambition was seen as suspect, or because ambition in a woman was often viewed in terms of prostitution.