I think when an artist covers a song for one of their OWN records they should totally make it their own and make the song fit in with the other songs on their album or whatever and interpret the melodies and adapt it to their own style...
But on an actual tribute/covers album of one band, such as Kiss or whatever, I personally think the covers all to be in the same general style/genre of music as the original band. Because obviously the only people that are gonna buy a Kiss tribute are Kiss fans who probably don't give a shit about what the Mighty Mighty Bosstones sound like and if they make the song "their own". You'd wanna hear good rockin' versions of your fave Kiss songs by other hard rock artists usually... Spin The Bottle does that well, so does Humanary Stew, and the Poison tribute put out by the guys from Pretty Boy Floyd & Shameless does that too, its purely glam.
Thats the difference in my opinion. The context in which the song is being covered, and in this case its a Kiss tribute album. I don't think Kiss My Ass was a good tribute album to listen to because it sounded more like a collection of covers that unrelated bands had recorded fo themselves for their records (even though they were recorded just for the album). To me it just sounds like Gene Simmons trying to prove how wide Kiss' influence was on all different genres of music, which is fair enough and a good idea because its very true, but not a good CD to listen to start to finish.