I think it was a right decision on the part of the police. The shooter had been talking to a police negotiator for hours and given multiple opportunities to give himself up prior to them taking this action.
He had already shot and killed several police officers and wounded many others. They did this after negotiations broke down and he again started shooting at the officers based on the information I have. There were also civilians at huge risk while he was shooting at the officers.
I think the bomb was the right way to go without risking another officers life trying to stop him from killing more people. I believe at this point anything that would work to end his killing of other people would be acceptable.