I think the point is that when someone is a victim of identity fraud, their credit report contains entries which are untrue. Making credit reporting agencies liable for those untrue entries would force them to accept the pain of identity fraud themselves rather than pushing that pain onto the people covered by their reports.

If, when there are errors on a credit report, consumers were allowed to sue and collect damages rather than having to fight to have the fraudulent entires removed, this would naturally result in a class of "ambulance chaser" attorneys that ran TV commercials and took cases on contingency, but it would benefit consumers as well since errors on a credit report would be more quickly and profitably resolved. The situation would be short-lived, however, as credit reporting agencies would have to make drastic changes in how they verify identities or risk hemorrhaging money from the lawsuits.

But those changes are what needs to happen, so making them liable would be a means to an end.