"I can't even imagine a situation where police would want to destroy a running device that could likely have evidence stored in volatile memory."

Exactly. That device has nothing to do with police or testing. The politically correct name is a way to avoid filters or to claim ignorance in case some customers do nasty thing with them. Not different from cellphone/gps jammers sold under the "signal/field generator" name.

"Even if it was their own device that they were retiring, it doesn't even wipe data, it just destroys the logic/motherboard."

And it's even very bad at it: most computers have internal usb hubs that would act as a (weak but sometimes successful) defense against these devices.