Could I ask UK experts why it is required to have the airshow at the actual airport? For example comparing this to Canada where I'm from, our annual airshow has performers use both Toronto City Centre and Pearson airport for staging but the actual show itself takes place over the lake, well away from roads and other infra-structure.
That's only for one show in Toronto, but not applicable to other airshows in Ontario and elsewhere in Canada.
As far as I know, the rules are similar in the UK vs Canada / US / elsewhere.
There is typically an "aerobatic box" away from the crowds where aerobatic maneuvers are confined to, and with few exceptions the energy vector from the maneuvers must remain pointed away from the "primary" spectator area.
Nearby roads, etc., are considered to be "secondary" spectator areas (as people might congregate there) so there are minimum altitudes and maneuvering restrictions relating to secondary areas as well.
(By definition, secondary spectator areas are outside the "aerobatic box" so no aerobatic maneuvers should be performed there).
In this case obviously something has gone terribly wrong with the descent going outside of the aerobatic box.