Their problem is they believed their own bullshit and thought they were offering people a good deal that basically amounted to "the government 1984s you more than they already do but your package thief gets arrested, maybe".
Ignoring the fact that that deal is not necessarily good, if they had been slightly scummier, not given two shits about actually reducing petty crimes against the people and instead set out to help municipalities collect civil fines (which have basically no 4th-8th amendment protections these days) they probably could have gotten away without scrutiny for a very long time and gotten their systems deeply entrenched. The useful idiots would've eaten it right up with the flimsiest of pretexts so long as each segment of useful idiots was peddled to individually.
"The truck we saw carrying 2-tons of waste tires away from your tire shop is not owned by an entity on the state approved list, pay up"
"We saw you leaving home depot with a water heater but you didn't pull a permit, prove it didn't go into your house or pay the fine"
"we saw your 2004 Altima emit a puff of blue leaving a light. Per vehicle code XYZ any vehicle that emmits a visible cloud cannot pass emissions inspection, submit proof of passing withing 30d or your resigstration is revoked"
If they had done that a lot of people would have eaten it up and asked for more. But nope, they believed their own BS and built a system for "real" law enforcement. And of course that leads to a bunch of bad interactions with cops and the public doesn't like that.