SHO limits don't apply to bona fide market making, I'm nearly certain. But regardless, you would expect the inability to short by non-MMs would actually keep ETFs and Stocks from hitting their breakers, not making it worse. By definition, you remove sell-pressure.

Until 10AM that day, the problem was zero buy-pressure. No bids at all to speak of.

http://www.etf.com/sites/default/files/images/2_rspsurveyor....