Good Point.
Though, it seems beyond the intended effect of the law. Trademarks should be things like The Official Nintendo Quality Seal. Remember that awful graphics on NES games (except the Tengen ones)? Or the "Nintendo" or title "Super Mario Borthers".
Those seem like legitimate trademarks, intended to help avoid consumer confusion.
IP lawyers do tend to push the envelope creatively in applying trademark/dress protection.
the graphics for Mario, if they're a direct byte-by-byte copy it should be copyright infringement (indeed, that may be the case here), but if you yourself draw Mario, you are the copyright holder of that drawing of Mario and those Mario graphics.
The idea that trademarks/dress *should* apply for the art-style seems pretty out-of-scope of the intended laws though, which is, as you said, to avoid consumer confusion.