While I fully agree with the empty shelf point (it WAS pretty pathetic), I don't accept the jacked-up price argument. Yeah, Target Canada did not have the prices one sees in Target US, but then Walmart Canada doesn't have the prices, either. Maybe in spots, but for the stuff I buy there's still a noticeable price reduction down south. Even factoring in the currency difference...
I think it's because Wal-Mart's been in Canada and people have grown used to the stores being there. Target was new, and it's way harder to overcome a screw up when new. Once the competition disappeared, things got more pricy in Wal-Mart so the Canadian consumer lost in various ways during this process.
I'm not sure they could have screwed up Target more if they tried. Perhaps this was all a tax write-off?