Their product is cars, not gas. Of course they should encourage people to buy cars. As for the second part, who said it did? Lastly, most people probably do drive more than 12,000 miles/year. Some people certainly don't drive that much, but they will increase the amount that they drive if the price they pay for gas is artificially made lower.
So why is it bad for them to encourage folks to buy their cars by offering around $600/year savings on gas? Cars do need gas.
It's not bad from a business standpoint. It's short-sighted from a business standpoint. From an ideological standpoint, it's providing a means (albeit a fake means) to continue a lifestyle counterintuitive to sustaining one's financial security. It's treating the symptom, not the disease. Thus the analogy to smoking. You could argue that such a dilemma is not Chrysler's problem, and that this is such just simple exploitation of stupid people. I'd agree with that.
