I see fault on both sides of the story. First the Chi should NOT have been lose. Second, the owners of the pit should've had it in adequate fencing. However, since they are new owners of that dog, it's highly likely that that fence HAD held their dog previous to this. Then suddenly there was 'prey' (because I think this wasn't about dog aggression but rather prey drive) on the other side of the fence and the pit went for it. Dogs can surprise you.... We had a GSD scale INTO our 6 foot wooden privacy fence once, I don't doubt a pit bull could've surprised their owners with some sort of escape.
Yes, it's important to know it could've been an accident that caused the chi to be out, and that is tragic. I really feel for the little dog, it shouldn't have been in this situation.
I see lose dogs all the time. Where I live they're mostly labs, but as for small dogs wandering? Almost all chihuahuas and toy dogs we get in the shelter were picked up as strays. I've known plenty of neighbors that let their dogs in the yard. I knew some with eskies that let them out when they knew they could get out of their invisible fence. Then the dogs got out and jumped in a golden's yard and got into a fight with him nd of course they blamed their big dog.
I think it's a fallacy also to say all chi owners never take their dogs anywhere or let their dogs out. I know I live in a college town and there's probably more toy dogs here (due to apartment restrictions) than most places, but I see chis around all the time. And actually a lot of them are really good, well rounded dogs. I also had several neighbors last year that would let their chi out on their porch and let it go potty on their own. Stupid? Yes, but it happens. I would not assume that the chihuahua was not lose if the people saw the incident and are saying the chihuahua was lose. Why it was lose though is anyone's guess.