Ah - the joys of 20:20 hindsight. A quality which wet liberals would appear to have in abundance.
The suspicion was clearly that the deceased had a concealed suicide bomb on his person; that was increased considerably when he failed to stand still when challenged and bolted for the Underground, acting in a manner which looked for all intents and purposes like the last desperate act of a suicide bomber about to kill himself and dozens of others.
In such circumstances an 'arrest' would clearly be impossible without exposing the armed officers and general public to potentially lethal risk.