Gallardo's forearm or wrist - not his elbow - hit Donovan in the face as he tried to pull himself free of Donovan's jersey-grab as they tussled in midfield. In fact, Gallardo, who was facing away from Donovan at the time, at first fended off Donovan with his arm across Donovan's chest, and came up higher on a second attempt.
This doesn't exonerate Gallardo from disciplinary action but it may explain why referee Jair Marrufo chose to issue a yellow card to both players. Officially, Donovan's caution listed as "dissent" for his tirade at the officials as blood seeped from his nose, but he could have been cautioned for his grabbing and pulling of Gallardo's jersey.
Only if Marrufo ruled the contact accidental could he permit Gallardo to stay on the field. (Obviously Galaxy coach Ruud Gullit, who complained bitterly that Gallardo deliberately hit Donovan and should have been sent off, didn't agree.) A "reckless foul" is punished with a yellow card. For the red to be shown to a player not already cautioned, "serious foul play" or "violent conduct" must have occurred in most cases.
Marrufo could have deemed the incident as serious foul play, regardless of Gallardo's intent, but this didn't seem equivalent to a wild, two-footed tackle that goes over or misses the ball and plows into an opponent's ankle. And if Gallardo truly meant to drill Donovan in the face, the American's nose wouldn't have been recognizable as such.
One of the assistant referees and the fourth official weighed in with their opinions, so either, (a) all three officials missed this blatant elbowing of Donovan; or, (b) Marrufo blew it and declined to send off a prestigious player on his home field in a nationally televised game; or, (c) it simply didn't constitute violent or vicious play.
A deliberate blow to the face, regardless of how severe the contact, is a sending-off offense, which is why Andre Rocha was sent off for violent conduct during a melee in the Houston-FC Dallas game May 28.
Rocha didn't punch Eddie Robinson, but did strike the defender in the face with his hand, and that was enough for referee Alex Prus to pull out the red card. (Prus was also about to send off Robinson for a second yellow card.)
Since Marrufo cautioned Gallardo after consulting with his fellow officials, the MLS Disciplinary Committee will review such an incident only if it believes the foul is so egregious or reckless a red card should have been issued. It does review incidents in which the referee took no action, which doesn't apply in the case of Gallardo.