> Why would a government that has "sold out to corporations" restrict the sale of lipstick and alcohol?

Governments are groups of people that are at least partially restrained by the wills and opinions of other, much larger groups of people. People are very complex. If you are expecting the government to have rules that it follows 100% of the time, you will be disappointed.

A rule such as restricting lipstick sales is something that is mostly inconsequential that the government can still point to and say "See, we don't just blindly do what megacorps tell us to!"

>A rule such as restricting lipstick sales is something that is mostly inconsequential that the government can still point to and say "See, we don't just blindly do what megacorps tell us to!"

What it really does is to keep the government in power by pandering to extremists. Rational and well-informed people don't respond well to the imposition of corporate oligarchy. If that's what you intend to do, you've lost the support of those people. Now you need the support of someone else. Religious extremists fit the bill nicely, because although hardly anyone will actually prefer corporate oligarchy, there are people who place more value on "conservative values" than they do on economics, so you ban some lipstick and you restrict abortions and those people support you no matter what else you do.

You see the same thing with the Republican party in the US.