Why do many senior leaders fail to follow the regulations? What can I do about it?

PFC Brasher - making on-the-spot corrections is the duty of all Soldiers. If you see it, assume the position of parade rest/attention, use military courtesy, and privately and politely let the individual know that they're wrong. I'd rather have someone correct me, than have many others let me to continue walking around all jacked up. This is NOT above your pay grade.

I completely agree with LTC Strickland and SFC Gilley. The only thing I have to add is a quote from an old CSM of mine. "Always remember, regulations are NOT suggestive in nature." In other words, at our level, we don't have the authority to 'pick and choose'.

We have a duty to tactfully address our concerns with the appropriate leader involved. I would also recommend someone in a senior leadership position coming alongside you who may have similar concerns or is a witness to the infraction.
If that approach doesn't resolve the situation, then you are forced to go above or around the leader in question. Using the open door policy or the IG are appropriate.
The key here is communication and honesty. First, ensure you have addressed the situation with the person involved and give them the chance to correct it. Second, ensure this is indeed a significant infraction and not just a petty difference of opinion.