Since most of us came from Neopets, we seem to automatically translate "chibi" into "baby." I agree with you, though--they're not meant to be babies; they're meant to look so cute they're scary. ^_~
Right, and if most of them actually look more like babies, then the name is somewhat irrelevant. Or, we mostly just don't like bigheaded-giant-eyed, however many hyphens go there, creatures regardless of what they're called.