On one hand it's entirely normal to target merchandise sales to the stores where that merchandise sells well, but in the case of pride, it sends a really clear message.
Target are basically saying they will 'support' queer pride, but only in liberal communities where support is already strong.
It's places where queer pride is WEAK that need a show of support, not where it's already strong!
The clear message is that as expected, this isn't truly about Pride at all, it's about money, and Target will happily allow homophobia to reign victorious in places where standing against it would hit their bottom line.