Is it appropriate to confront a higher rank when they are blatantly disregarding regs?

Absolutely, just use tact. Or another way to go about it and just make it into a question. Like "SGT I was told we can not wear lipstick like that. Did the regulations change or something?"
I was jacked up one day with my uniform and about two hours into the day a PFC walked up and said "CSM can I ask you a question in private." He told me what was jacked up on my uniform. I was mad no one else squared me away sooner. So I gave him a coin and asked the Frist Sergeant walking around with me the past hour why no one else had enough nerve to tell me. NCOs should realize they are being looked at as the standard bearers at all times and should expected to get called out if they are jacked up!

You have a duty to correct deficiencies whenever you see them. Use tact with superiors. Don't confront in front of others and be respectful, but don't waiver.

You should absolutely make an on-the-spot correction. Here's my quick list of do's and dont's:

DO:
-Be respectful. Whether you're correcting a superior or a subordinate, always be polite, professional, and tactful. More often than not, it's typically senior leaders "shaming" soldiers rather than or in addition to correcting them. We've all been corrected before, because we've all been wrong. Be mindful of how it made you feel when someone corrected you privately versus embarrassed you publicly.
-Be right. If you're going to make an on-the-spot correction, have your regulation ready on your smart phone or in your hand. Be aware that sometimes, MILPER messages can sometimes modify or update rules and regulations before they hit the books.
-Be squared away. Don't throw stones in glass houses, so they say. The same goes for making corrections. It doesn't do you any good to point out someone else's deficiencies when you yourself are jacked up.

DON'T:
-Remain silent. If you yourself are not comfortable making the correction, or are unsure of whether or not it's wrong, ask. Ask a superior, a battle buddy, or even ask the individual you're considering correcting. Plenty of people have phrased it here extremely well: simply saying "Excuse me, I was wondering if we were authorized to..." can often initiate a professional dialogue.
-Make a scene. If you're in a public place, ask to speak privately with the individual, or wait for a more private opportunity. Remember, you're trying to make a correction, not embarrass someone.
-Be prideful. If you're mistaken, take your licks and continue mission. I and many others like me have made what we thought was a correction, only to learn we were mistaken. It happens, but it's not the end of the world. At the end of the day, someone learns something.

Ultimately, remember this: you are making a correction to improve the military culture. Enforcing standards improves our organization and keeps it running well. Embarrassing people damages our camaraderie and divides us. Anyone in the military who gives a damn about keeping up standards will thank you for the correction, and anyone who gets angry with you for pointing out a deficiency probably has a problem that goes far deeper than their lipstick color.