It is indeed, in the 40's they had this issue, when planes were a ~mile apart they become a mush on the screen.
However thats not the case nowadays. Even if you had a nasty radar from the 80's you see that the trace is twice the size it should be. (We'll I'd hope)
I'd assume that military radar ops would be looking for this, as this is a great way to sneak assets about.
From what I read elsewhere, synchronization problems between different radar systems and other effects can also cause echoes or "ghosting" to appear, so it's not uncommon to see more than one trace for a particular object. Depending on the sophistication of the radar system, these traces could be ignored either by software or by operators.
When they say they put national security second to investigating the flight, what they're saying is that they're now exposing a lot of information about these radar systems with other countries in order to figure out what happened.
