I think you may have missed this part: "Chase and other banks say they will cover unauthorized transactions that customers report."
My feeling is that Chase would rather inconvenience their customers than lose money from reversed merchant transactions. The burden of this mishap got placed largely on us, the consumers. Target is getting off easy at this point.
However, I'd rather they use this approach and temporarily drop limits than potentially let some consumers (who are more than likely unaware of what happened) possibly wake up XMas day to a drained checking account because they made the mistake of using a debit card.
Theres nothing quite as a bad as going to put gas in your tank only to find someone drained your account.