Yes, she was shot, but the picture forming of the shooter suggests more of a strike against gov't and she happened to be the local face of that gov't.
That a congress WOMAN was shot, and a Democrat, does seem to appeal to the media. I think I mentioned yesterday in another reply, it fits with their narrative about "angry rightwing, gun lovers and hate radio." The idea is so part of their world view, they don't even realize when it fails to fit the facts.
Another Freeper pointed out that the killer hated the government - any government, since he was a nutcase anarchist - but he also hated the Constitution, and Gifford was one of the Congress members who read the Constitution aloud the other day. She read the 1st Amendment, incidentally.
Paranoid schizophrenics often feel persecuted by things, or feel that people are using things (everything from random noises in the water pipes to documents being read aloud in public) to persecute them. Schizophrenics are very self-obssessed, and they feel that everything is directed at them.
So it’s possible that he shot her because he regarded her as being behind his “persecution” by the Constitution, or as representing it.
Actually, given reports from Loughner’s erstwhile classmates, it seems Congresswoman Giffords was specifically the target: Loughner met her before and seems to have had a three-year long obsession with her.