I can't see how it's better dps. Better burst, sure, but there's no way it's more overall damage.
In theory you would have to wait 1.5 seconds for the damage of chain reaction to even start, as opposed to the instant burst dps of short fuse. However, I do agree that chain reaction does proc more crits and does do better overall dps in a multiplayer game.
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Read this thread for Short fuse vs Chain Reaction
http://us.battle.net/d3/en/forum/topic/5979088235
for some reason there is a slight delay with short fuse during high CM proc rate, as in
cast short fuse > cooldown reset immediately > slight delay of casting the next one.
and this doesn't really happen with Chain reaction.