I have shot quite a bit on steel targets with rifles and handguns. I am currently deployed in Iraq, and immediately prior to this deployment I attended a course where in we shot over 3000 rds of 9mm and 5.56 and 7.62 per person in a weeks time. From as close as 10 meters out to 100 meters. No accidents, no injuries. The ammunition was almost all FMJ, some of it M855 ball. No problems at all.

I think the issue is whether or not the target is rigid (as mentioned by a previous poster) All of the steel I have shot has been either hanging, pivoting, or swinging. All had the ability to move when struck by a bullet.Commonly referred to as reactive targets. The use of steel targets for tactical training is the norm. Spalling was observable but what we saw was a radial dispersion of fragments upon the bullet striking the target surface. From 10 meters away, you would see bullets spall up and drop to the ground, occasionally see a piece of spall loop up in the air and come back towards the firing line but in a manner similar to if you picked a piece off the gournd and lobbed it underhand towards the target.

Rifles were limited to a minimum distance of 25 meters. You could observe rounds hit and really smalck the targets but they all disintegrated. The targets would really get hammered, swing wildly on thier chains. We also used what are called pepper Poppers which pivot at the base. Same results.

I would surmise that firing a round at an extremely rigid steel target that would not have any give to it would cause that to happen, just like shooting a BB at plywood. Yes, they richochet badly. Same principle.
Just my 2 cents.