Yes, it is too short - it is out of proportion. It being black is part of the off look - something lighter might look better at that length.

One option might be to change the waist.

It all depends on how the kilt was sewn together, but a wider waist band might be the solution to having the hem as in the 'lower' photograph, but providing more height on the body, and a feeling of greater security.

If there is a waist band it might be possible to use that as a front for the new one. If it has to be mangled for removal then it need only be replaced where visible. If backed with some sturdy material it might not require anything more than the fastenings supplied, but a clip at the very top edge might make it look neater and feel better.

If there is no material to use then something which is less shiny than the original is always less obvious - even if the colour is close, shine seems to be a dead giveaway.

After all that though - maybe the kilt should go back to the maker as a misfit or reject?