Reg. DD requires that fees be disclosed. I saw that one very large bank discloses a sliding fee based on the # of NSF items presented. The fee structure they use is
$x for first day an NSF is presented
$y for days 2-5
$z for days >5.
I'm not sure if the charge is per item or per day. Would either be allowed by Reg. DD?

Regulation DD doesn't regulate whether a charge can be imposed; it requires that it be accurately disclosed. The regulation has some substantive rules on how interest is calculated and credited, but it doesn't limit fees.