Presumably they can do this because they're not actually bitcoin transactions, just exchange trades. The bitcoins and USDs entering and leaving Mtgox are not going to roll back.
How do you "reverse" transactions that live in a peer-to-peer network? Or are you saying that MtGox has some kind of buffer of transactions that haven't been "executed" onto the network yet?
As far as I understood bitcoin, there is no authority. Nobody can do anything about a user having 500k of his coins hacked, and nobody can do anything about the market crash either.
As long as the money hasn't been withdrawn from the market, the market should be able to reverse all the transactions. The problem would be if the BTC or USD were withdrawn from the market before they shut down trading.
MtGox != Bitcoin. Transactions on bitcoin network cannot be undone, that is true; however, MtGox will undo the transactions inside their system (buys and sells within MtGox). The only thing that cannot be undone is the withdrawal of 80 stolen BTC from a MtGox account into Bitcoin network.
they'll probably reverse all transactions since then
How can they? Surely if the blocks have started to get verified by other users then you'd have to fork bitcoin to do it? Wasn't "There are no chargebacks" one of the selling points of BitCoin?
they'll probably reverse all transactions since then