I'm an MSIII. In my experience, makeup is completely optional in years 1 and 2. No one really cares how you look, your performance is basically just how you do on your exams. Wearing makeup is your preference.
In years 3 and 4, makeup is almost an absolute requirement. Bottom line is, you need to look good during your clerkships and that includes your physical presentation. It's funny, if this was business school, this wouldn't even be a question, you absolutely "dress to impress". And we all know that during clerkships you have to impress everyone, not just your attendings, residents, but nurses and your patients as well. Like it or not, if you can use makeup the right way it will definitely help you do that.
My personal experience with makeup is a bit different b/c I use makeup to actually look older. I look so young that in the beginning, I had a bunch of patients glance at me and was shocked that I was old enough to even be graduated from college. It's definitely a lot harder for patients to take you seriously if they think you barely pass 18. It's not hard to imagine that this makes your day unnecessarily more difficult. After I upgraded my daily concealer to a regimen of foundation, eyeliner, eyeshadow, mascara, and blush, I've never been asked my age once. In fact, I've had nurses ask me if I was the new resident. So in my book, makeup is a huge plus.
P.S.: My makeup tip: For those who are worried about smudging or having your makeup slide by the end of the day, wear good PRIMER. You won't have to use as much product and it'll help your makeup last all day. I recommend Urban Decay Primer Potion for eye makeup and Smashbox Photofinish Primer for face (or Lancome La Base Pro if you can spare an extra buck). Especially UDPP- I swear that your eye makeup will last through a 24+ hour call no problem!!