This must be a new policy. I was always told we didn't do that.
If you have time. Some times you don't.
Probably not always, but there were a few shootings where the people in the car turned out not to be armed and the media screamed brutality, so I would imagine the policy was in response to that.
BTW, the Vietcong used to rig up children to explode and send them running to the gates, knowing that American soldiers wouldn't want to kill a child. The Palestinians send bomb-laden pregnant women through checkpoints (I believe one of them killed several soldiers). Letting people through if they won't stop is not a good idea, but I think the policy was changed in response to the "international press."