When I lived in Ft. Wayne many years ago, a gradeschool aged girl was killed on New Year's eve by a bullet fired into the air. It struck her directly in the top of her head and killed her instantly. It isn't terminal velocity that's the problem, it's general velocity. Remember that a bullet is leaving the barrel much faster than terminal velocity, and it is going to drop due to gravity long before it loses speed to just terminal. Like Jayhawk said, it's trajectory. Terminal velocity would only apply in the strict sense if the bullet were dropped from overhead, with an initial starting speed of 0. Ballistics can have some weird (and non-intuitive) effects.
In fact, the Allies had a terminal velocity (kinetic) ordinance that looked like a miniature bomb about an inch or so long, made from about 1 oz of steel. It was scattered from high altitude aircraft and designed to do damage over a broad area against personnel and soft targets. It was not fired from a gun, but depended on the speed it picked up from being dropped from a great height. I don't have any data on how effective they were, but I wouldn't want to be under 'em. Even a regular bullet, if high enough caliber, can do a lot of damage even at just terminal velocity.
From personal experience, the living history village I volunteered at North of Phoenix (Pioneer Village) was on the other side of a low mountain range from the Ben Avery shooting range. One day the USMC decided to let rip at the range with a few M2's (.50 caliber for those who don't know) The rounds arced over the mountain after hitting their targets (we assumed, as we figured even jarheads wouldn't be dumb enough to fire M2's into the air near a populated area), and strafed the village. We had to take shelter, and afterwards, repair a lot of holes in roofs, wagons, and other outdoor displays. A year later we were still finding spent bullets in the ground when digging for any reason, some as deep as 4 inches of packed dirt.
I can easily believe the bullet came from a gun fired into the air for whatever reason.