In this case, I think the cops chose the best option(s) they had available to them in a deadly situation. With multiple officers down and civilians being shot at, they took out a mad man who had no regard for his own life, or anyone else's.
As for all this talk about infrared technology, I'm far from being very knowledgeable on what's available these days. But my understanding is that infrared works best on targets that are out in the open (the less they move around, the better), not blocked by walls or other objects. And from what little I've read, glass, metal, plastics and even cloth will block infrared imaging. As long as the target does not maintain a static position for a long period of time, thereby establishing a heat signature, you wouldn't be able to "see" him. And this guy was in an aluminum/tin skinned trailer, with studded interior walls topped by some sort of drywall, I assume.
But like I said, I don't know exactly what is out there these days. So if someone knows of an optical technology, that is available to police, that would allow a sniper to "see" through walls in real time, and distinguish a good target from a bad target, please describe it or provide a link. That would be really interesting stuff that many of us would like to read about.