Should we ever discourage a brother or sister? Encouragement is great, but if the shoe fits, sometimes we need to wear it. Even God, for example, Who is perfect, discouraged Cain by confronting him and telling him that he was going astray.
With each other, we need to encourage good behavior while discouraging bad behavior. It's tempting to never admonish or rebuke, but to instead just set good examples and encourage and exhort, hoping that it'll be good enough! Yet God tells us to "admonish the unruly, encourage the fainthearted, help the weak, be patient with everyone." (1 Thessalonians 5:14)
Sometimes some loving confrontation is what kills sin. Be careful about your attitude though, and check your own eye first.
"For the entire Law is fulfilled in in this one word: "You shall love your neighbor as yourself."—Gal 5:14