Did they really think that was a credible threat, or that blowing him up would stop the bombs from going off? In his position, if he could remotely detonate the bombs, he probably already would have, between the time he said he was going to and when they sent in the IED. If he could not, it didn't matter, he wasn't going to get the opportunity to leave. If they were on a literal dead man switch, killing him would cause them to go off.

More importantly, it is NOT the jurisdiction of the police to pass judgement and penalties on the suspect. Deadly force is only legal when the officer reasonably believes that the suspect poses a significant, imminent threat of death or serious bodily harm to the officer or others. Note that the threat is a future threat, irrespective of whether harm was caused in the past.

But I suspect that your reasoning becomes clouded when it's your friends and coworkers who have been shot. Giving the accused a lawyer and a chance to defend himself in court is his right, but that's hard to do when you've seen someone you love die.