I think your analysis is wrong. Someone started a thread over at packing.org, and a police officer reported that the zylon material really is junk, and is failing to stop rounds.
Maybe Zylon is failing. The solution is to get it out of the field ASAP and continue R&D. The solution is NOT to destroy the lead company over a new-technology mistake, cease production of the best vests out there, and discourage anyone from developing better materials.
But the bottom line for the society as a whole is fewer armored vests. Is that a good choice?