I'm sort of surprised, too, since it's a nice alternative if you want a dark, understated band, but don't want black, but Target probably has done enough analysis. It's a shame there aren't some more expensive bands that are in stock, but not selling well.
I wonder if it's because it coordinates with fewer bands? I'd imagine it would be tough to wear space gray or black with the midnight blue, for example, because the colors are so close together. I tend to think that most bands pair fine with most watches (heck, I have a rose gold watch, which some people think is the hardest to pair with, and I have over 50 bands that coordinate well with it), but dark blue and black might be more of a categorical fashion no-no?
I think I read on reddit that someone lucked out and found a milanese loop at Target on sale, but I've only seen that happen to one person!