I can't comment on that, since I have no first hand knowledge of how the liquor laws in Utah are enforced. However, around here, they generally legislate exceptions to the last call laws, which are not all that restrictive to begin with. On occasions like New Year's Eve, the annual street festival, and other events, last call has been known to be extended to 3.
Extending hours for the Olympics seems to me to be a reasonable compromise that, if done properly, wouldn't inconvenience local residents much, but be positive for visitors wanting to party as well as the proprietors of local establishments.
That's like street festivals back in the St. Louis area - every time we had one vandalism shot up and you were kept up all night for days at a time by drunken idiots pounding on your door every few minutes, and the smell of urine the following few days was atrocious, every corner reeked, every alcove, porch, backyard, beer bottles and trash all over. They cancelled a lot of the things because inebriated people were causing so much damage... and no one had even cut off their taps, it was just normal behavior- regular evening boozers just do it on a smaller scale than festival drunks and are less dangerous in that regular weekday boozers don't form mobs. There is room for leeway with individuals, but never room for leeway with crowds.
Rubber bullets are good for something.