According to the report, the police were hoping that he would lead them to the location of the other bombers. It seems to me that this is probably a cover story of some sort - surely if they had tracked the suspect to his "home", it would make sense to contain him there. Allowing him to move on to the streets would make him a danger to the public if he were indeed a suicide bomber - it's one hell of a risk to take.
There is a balance between intelligence gathering and public safety - it's hard to see what intelligence has been gathered, and if the guy was indeed a fully-wired bomber ( which I doubt at this stage ) then the public safety was compromised to an insane extent.
