Scooter's analogy is an extreme example of the situation, but oddly I have been in very similar situations - unsafe set design and inappropriateness on a show that is schedule to have multiple school performances.
I think the core question at the heart is, is there ever a point when you are watching the show where it might be so BAD, so different then what is being advertised, so different then what the artistic director/producer are expecting - do you feel have the responsibility to speak up? How you speak up is the next step - and most of agree, that really want you would prompt is either the artistic director/producer coming to rehearsal, or, at the very least, starting a conversation.
Now, there may also be a situation where both you and the director agree the show is going bad - wrong casting - bad scenic design - not enough rehearsal time - whatever - it may not be a situation where you are "snitching" on the director . . . .
(I know that I come from the perspective of being NOT a free-lance SM, but a resident SM, and have a very big investment in the theatre, not always the director.)