I think the broad thrust of your argument is right on the money. Officers' perception of heightened (or unfair) accountability has turned every police interaction into a risk for the officers and department, too. However, I think the problem actually goes even deeper. The incentives are all aligned to launder responsibility through automated systems, and we'll end up sleepwalking into AI tyranny if we're not careful.
Where I am, police officers get paid healthy 6-figure salaries plus crazy OT to boot. $300k total comp is absolutely not unheard of. I think the police have basically figured out that the best way to stay on the gravy train is to do as little as possible. Certainly stop enforcing traffic laws entirely, as those are the highest risk interactions. Just rest n' vest, baby. So you get to hear about "underfunded" and "overworked" police departments while observing overpaid police officers who are structurally disincentivized from doing their jobs.
The bottom line is: People want policing, but adding more police officers won't deliver results and anyway is too expensive. What to do?
Enter mass surveillance and automated policing. If we can't rely on police to do the policing, we'll have to do it some other way. Oh, look at how cheap it is to put cameras up everywhere. And hey, we can get a statistical inferential model (excuse me, Artificial Intelligence!) to flag "suspicious" cars and people. Yeah yeah, privacy risks blah blah blah turnkey totalitarianism whomp whomp whomp. But think of all the criminals we can catch! All without needing police to actually do anything!
While police are expensive and practically useless at doing things people want, this technology can actually deliver results. That makes it irresistible. The problem is that it's turning our society into a panopticon and putting us all in great danger of an inescapable totalitarian state dominated by a despot and his AI army.
But those are abstract risks, further out and probabilistic in nature. Humans are terrible at making these kinds of decisions; as a population we almost always choose short-term benefit over abstract long-term risks and harms. Just look at climate change and fossil fuel consumption.