Lunacy or not, the regs are as such. Not all regulations are logical in every situation. Flying a drone above 400' AGL is illegal which makes flying one over a cliff higher than 400' illegal regardless of it's MSL or even if it was below 400' MSL for that matter.
In your previous question about a drone legally at 400' AGL (800' MSL) meeting an approaching Skyhawk at 800' MSL (400' AGL), the Skyhawk would be illegal as a manned aircraft cannot fly below 500' AGL unless for the purpose of take-off or landing (special purpose flying such as crop dusting, practice force landing, exigencies, etc. aside). However, the lawyers from both sides would have a hard time fighting the case. It's not about what/who is right or wrong, it's about what you can prove.
The Cessna would not, necessarily, be illegal at 500 feet, FAR 91.119 (c) makes an exception:
Sec. 91.119 — Minimum safe altitudes: General.
Except when necessary for takeoff or landing, no person may operate an aircraft below the following altitudes:
(a)
Anywhere. An altitude allowing, if a power unit fails, an emergency landing without undue hazard to persons or property on the surface.
(b)
Over congested areas. Over any congested area of a city, town, or settlement, or over any open air assembly of persons, an altitude of 1,000 feet above the highest obstacle within a horizontal radius of 2,000 feet of the aircraft.
(c) Over other than congested areas. An altitude of 500 feet above the surface,
except over open water or sparsely populated areas. In those cases, the aircraft may not be operated closer than 500 feet to any person, vessel, vehicle, or structure.
(d)
Helicopters, powered parachutes, and weight-shift-control aircraft. If the operation is conducted without hazard to persons or property on the surface—
(1) A helicopter may be operated at less than the minimums prescribed in paragraph (b) or (c) of this section, provided each person operating the helicopter complies with any routes or altitudes specifically prescribed for helicopters by the FAA; and
(2) A powered parachute or weight-shift-control aircraft may be operated at less than the minimums prescribed in paragraph (c) of this section.