I do not know what the guidelines for offensive response are in a shootout. How would those guidelines change for a variable such as an RPG or IED devices? If they are using small arms, are police only allowed to respond with small arms? I think we can reason out any hostages inside. Since smokes were popped and LE was firing, I'm sure someone had IR gear and could confirm the number of occupants. If that's NOT what happened, I'd honestly be surprised (and I very well could be when/if it comes out that I'm wrong). I thought that I had the opinion that the police reacted poorly, but after asking myself these questions I really don't know what to think. I'm sure they were terrified and it seemed like the right thing to do at the time.
"Shut up, crime!"