I always say "Merry Christmas" unless I know the person is Jewish. More than 95% of Americans celebrate Christmas, so all this tiptoeing around is a bit silly. That said, I think stores and TV stations say "Happy Holidays" as a shortcut for Merry Christmas, Happy Chanukkah, and Happy New Year. They don't mean it to be offensive -- especially when it's written in red and green.
NO, because you notice, they still say "Happy New Year." Happy Holidays is a phrase that's being used in order to consign "Christmas" down the memory hole. It's being used by people and businesses who either share the values or, or are intimidate by, PC and anti-Christmas elements, groups who are at war with our cultural traditions.