There are many problems visible in this subject. I try to make a small comparison how things would be handled in Switzerland.

In Switzerland this would happen:

a) First of all there needs to be a communication between the Gangster and the police. You need to get a clear picture of the situation, how many Gangster are in there, how many innocent people are in there, Police should evacuate whole area, removing people of the danger Zone and make sure that nobody can escape without the police knowing. Don't try to escalate the situation. The Police is guarding the area, the Gangster cannot escape, so the best would be just to give up.

Always give people a choice to do the right thing.

b) If the Thugs decide not to give up, they should just wait for the Elite Team or S.W.A.T Team a specially trained team for such cases. They would enter with smoke and protection and could eliminate the target much easier then just random shots.

For most countries the way the people in charge handled it is just a desaster and it would have political consequences, people would loose their job because of not being capable.

People that you can blame in this case:

a) The way the police handles this situation is completly unprofessional, in Switzerland they would be removed from their job or replaced.

b) People in charge of this operation also must be removed, and there would be political pressure to make sure to put the right person in charge in the future.