It is indeed as you say re: middle pedal.
Half-pedalling is a universal pedal technique, and not just for pianos lacking the middle pedal. It is used to maintain the bass line as much as possible, without cluttering the upper register with unnecessary resonance. The result in the Debussy is, you get a cleaner change of harmony while still preserving the bass (C octave) for as long as possible. So change pedal every chord, but lift it halfway up, not all the way. (Or to be more specific, lift it only up to a point where the upper register starts to get dampened, before depressing it again - it's usually around halfway anyway...use your ears as judge!)