Without absolutely knowing that, they should have acted as though there were hostages. That rules out burning down the cabin.
I absolutely agree MLeake, certainly burning it down was stupidly irresponsible, even cruel. I was addressing the undertone I'm feeling here that "police forces shouldn't have used any lethal force at all to prevent them from being judge, jury, and executioner."
FYI, it's very possible that they used thermal imaging equipment mounted on a helicopter to determine the number of people in the cabin... Regardless, burning it down was not brilliant by any means.