From what I've read, the shooter was contained and did not have hostages. They didn't need to bomb him to death because "negotiations failed," they could have kept him under siege until he was forced to surrender due to lack of supplies. The fact that they had to drive in a bomb is a strong indication that the shooter was not an immediate threat. If he was, a sniper could have got him.

I think the police should never use lethal violence if there are any passive options available to them. This guy was obviously guilty of murder, but I'm more worried about other cases where the police might decided to use techniques like this in the name of safety, such as a "drug bust" against "armed and dangerous criminals" that happens to be carried out against innocents at the wrong address.