What short block times need to do is require X confirms before the input is spendable.
Vendors can already decide how many confirmations they will require (if any), so this isn't a protocol problem. Beyond that, the amount of computing power supporting the network and the amount of time necessary (on average) to generate confirmations are factors in how secure a transaction is. So, based solely on block time, a transaction on a coin with a 1 minute average confirm takes 10 confirms to be as secure as a transaction on bitcoin with a single confirm. However, when you factor in computing power, that gets even more complicated. For instance, 1MHash/s of Scrypt is not equal to 1MHash/s on another algorithm, so you can't really compare Bitcoin and Litecoin security in terms of Hash/s to determine how many additional confirms would be necessary in addition to the quadrupling of the number of bitcoin confirms to match litecoin's 2.5 minute block average. In regards to how to compare the security of various coins with different algorithms, I don't know what measure would be best (flops? watts? IOPs? etc?).
Yes, the average block time of Bitcoin is merely a tradeoff set by Satoshi. If we want to see how other coins perform with other block times, and also other parameters different from Bitcoin, we can just look at the altcoins. I'm not saying that other block times are better or worse. I just think that they don't matter as much as people think they do.