To the contrary, plenty of chairmen would hire or fire residents or fellows based on what the department's bottom line and needs are. You have to keep a few things in mind though.
A lot of academic department's finances aren't their own. Yes they have to earn, but even if you're totally unprofitable but necessary like pediatrics, you don't have to worry because the institution will just skim the profitable departments to keep yours afloat. Also, faculty salaries at most institutions are fixed and capped - which is to say that a chair earning $650K won't make any more or less depending on how the department does financially. Of the academic institutions that I know of, all salary changes have to be approved by the higher ups beyond the chairman. Some departments do annual bonuses as a revenue sharing type thing, but from what I'm told they're rather measly.
So as a chair, and I could be wrong about this, you only have to meet your expenses for the year and after that it's all extra money that may or may not stay in the department depending on the overall needs of the institution. So therefore it stands to reason if they're approved for more residents, why not get more residents because if you don't the money will leave your department's control and go somewhere else to fund someone else's department. And, if you can get 2 residents for the price of a PA who are on annual renewal contracts rather than an actual employment contract, that's even better. And if you can magically create non-ACGME accredited fellowship positions where most of the time the fellow actually signs out cases on a salary that is a fraction of an associate professor's salary but yet has equal responsibilities, that's the goose that lays the golden egg.
Successful departments will be able to bankroll these kinds of positions even after the cuts. Mediocre to poorly run departments will not be able to, and will try to find the savings somewhere unless their home institution wants to prop them up. Given pathology is universally at the bottom rung of any ladder, anywhere, that's not likely.