No they can't. Retirees are subject to the UCMJ and must respect the articles governing proper wear of the uniform.
http://www.ucmj.us/sub-chapter-1-general-provisions/802-article-2-persons-subject-to-this-chapter
Article 2 of the UCMJ:
(1) Members of a regular component of the armed forces, including those awaiting discharge after expiration of their terms of enlistment; volunteers from the time of their muster or acceptance into the armed forces; inductees from the time of their actual induction into the armed forces; and other persons lawfully called or ordered into, or to duty in or for training in the armed forces, from the dates when they are required by the terms of the call or order to obey it.
(2) Cadets, aviation cadets, and midshipman.
(3) Members of a reserve component while on inactive-duty training, but in the case of members of the Army National Guard of the United States or the Air National Guard of the United States only when in Federal Service.
(4) Retired members of a regular component of the armed forces who are entitled to pay.
I'm a retiree too.
First, Scotus changed uniform issues.
Second, retired receving pay are rotc instructors, service school instructors, and the like.
Agree with you in regard to the rules in place, but the list of those retired and brought back on active duty for a courts-martial is mighty small, and normally is for something egregious that occurred while on active duty.