IIRC, there were a buttload of CMHs given out for actions at Little Big Horn, too (which, I'm pretty sure there were several acts of bravery - especially those guys who had to go get water. That had to suck...) which I believe several of them were recinded later, since they didn't quite meet the bar...
Bit giving them out for what happened at Wounded Knee? That was a farce...
I agree with you there, I also think there'as a move by the Lakota to have the US Army Battle Streamer recinded for Wounded Knee.