ampclamp, sure there are technical & fundamental traders who use this publicly available data. Fundamental traders would possibly construct their own data too (ratio's & metrics between airlines, oil price and modelling the economy etc). However, the smart money has other information
not available to everyone, lets call them "information" traders, they specialise in knowing who & what to know & front-run the public information flow. You may want to read up on
Raj Rajaratnam & his Galleon Fund & insider "
expert networks". Where ever the ability to profit from this information asymmetry exists, it will be used, hence the "smart money" gives us hints at their view, and one of these metrics is short interest.
Its not nearly as easy to go short as to go long for the retail investor (try finding a retail short selling broker,
google search) unless you use some sort of leveraged instrument (CFD's & options). Institutions and Hedge fund have no trouble borrowing stock to short, this is routine business for them.
Some of the reported shorts would be hedges for options, warrants & CFD market makers. However, I believe it provides an excellent view how insiders consider the likely risk/reward skew in prices because
retail can't do it easily, ie only connected bigger traders will use shorts routinely. It is still possible to do retail, just not easy.