My Dad and I had a heated discussion about this last night. He agrees with you. IMHO, until there are more Nat'l Guard in there the police should let the looters go. The chain of command in the PD has broken down. Officers on foot don't have communication w/ other officers (from my understanding anyway). And at this point there's nothing the looters could steal that's worth an officer's life. However, once the reinforcements have arrived, I think they should let 'em have it with both barrels.
What are they going to do with a bunch of stolen goods? Take them with them on rescue boats? Sell them to other looters? I don't get it.