I don't see that this issue "retconned" anything. "Chosen" was a reality-changing episode, and everything that comes after it is going to be different from what came before. Things are going to change quickly and constantly now.
I do worry that the writers, in their effort to provide a clever new challenge for Buffy and to make their "social commentary" about our desensitization to violence, addiction to lurid entertainment, etc., will neglect all the ramifications of the huge can of worms they've just opened up.
Now, if in real life it were to be suddenly revealed that vampires really do exist, it would certainly spark a response that goes far beyond reality TV.
Almost all vampires are killers. They can't help it. They can't stop just because Harmony gives them some good publicity. If the Buffyverse is now going to be aware of vampires and not see them as a huge threat, we need to have an explanation of why that is. One cute blonde vamp on TV is not going to cut it when the police, the FBI, Homeland Security, and thousands of independent investigators around the world get a look at the big picture... present and past.
This storyline has the potential to become totally implausible very quickly. A simple "abracadabra! everyone in the world now loves vampires and hates Slayers" just doesn't work. It's going to take some really deft storytelling to pull this off. I hope I am not disappointed.
I do think there was some sloppy editing in this issue, right at a time when sloppy editing can least be afforded. They forgot to tell us the Slayer's name (Soledad...Scott Allie admits this was left out by mistake); Soledad's story switches unaccountably from first person to third person when she decides to attack Harmony; the cross around her neck, which should have prevented Harmony from biting her, disappears without any visible reason between one panel and the next; and they never make it clear whether Harmony killed Soledad or just stabbed her in the shoulder and bit her like she'd been biting everyone else.