Personally, my issue is not that benefits won't go to MAC. If these products are authentic, and I believe they are from what I can tell, then MAC has made a profit. I would be more concerned with the brand image, i.e. loosing the exclusivity of a brand that is sold at MAC stores/counters rather than distributed next to drug store brands in a supermarket. If there is an overstock - and it sounds like these are older products - it would be wiser to sell them at a CCO. It's just my opinion...
Do you know if this is just a one time sales or is MAC now permanently sold at Target? Anyways, I think MAC will sell well at Target if it is priced right.
PS: I think I would slightly freak out to see MAC sold at my local Target in the US.