My opinion is yes, you should tell her. But that's because I am of the mindset that if it were me, I'd want someone (I am very close with) to tell me....
I've had this happen before. My brother in law very later of factly asked wtf was up with my hair. It stung, but when I looked in the mirror, he was right. Sometimes blunt is best if you have that kind of relationship.
As she doesn't know if she likes it, I would use that as an opening to suggest something different. I don't think they necessarily need to dye her hair first, but they need to pick a different shade of blonde. And really- "frosted" makes me cringe.
My sister and I are super close, so I think that we would both tell each other. If your sister is already unsure just tell her you think that maybe they would look better with her hair color and skin color if they were a little warmer. She can go in to the salon and tell them she wants them toned to a warmer color.
I guess it depends on your relationship. I would have told my sister right away, I think she would have done the same to me. Hopefully she can go back and get them to fix it for free, I had a salon do that when they effed up my layers.
I used to get a fake tan at this place that made my skin look... Well, just bad. My boyfriend at the time mentioned something and I was glad he did.i actually get a little wtf at my close friends who don't tell me this stuff.
If she's waiting to see if she likes it, she doesn't like it. I know instantly if I ilke my hair cut/color.If she asks you, just say "You know, I liked it at first and I agree that the highlights were a GREAT idea, but there's something about it that just doesn't quite suit; maybe if you had them warm it up a bit"
That's as far as I'd go.
I'd also suggest she ask friends for stylist recommendations. Some of my most disappointing hair cuts have come from "upscale" salons.