The bottom line is the guy was a loony and if he was actually sane then this was probably a suicide by cop situation. If he wasn't actually sane, then they shot a guy they could probably have subdued and put in a straight jacket. Either way it doesn't look good for the police to be doing this in front of the whole town.
Regardless of how you feel about the police, there is a distinct difference between the present and the recent (say last 30 years) past. The police appear to be very quick to shoot these days. The common theme in many of these events is "comply or I will shoot you." Back in the day, you might get beat up, put into submission etc, but the last thing they wanted to do was actually draw their weapon and fire. There was just too much paperwork, investigations and general hassle when you did that. What has changed?
I recall hearing about the best way to handle N. Korean infiltrators when I was over in S. Korea. These were special agents who would infiltrate into the south to spy or sabotage stuff. If you were a S. Korean police officer who came across one and you arrested him, you were instantly removed from society, placed in a secret holding area to be debriefed and never heard from again. If you shot the infiltrator, you were rewarded with a house, pension and your own TV special. Not surprising there weren't many infiltrators arrested...
So, what has changed to make shooting the first (or nearly first) choice for our police forces these days?
edit, in support of my LE friends...police appear to be a lot less reluctant to shoot then previously.