Yeah, the cops screwed this one up. Even when the evidence in hand is a recording of events, protocol has to be followed. There should have been enough other evidence (photos of the victim, victim testimony, etc) to get something to stick too, which it looks like the cops neglected to collect.
And (not aimed at you!) why is it better for a guilty person to go free rather than even one innocent person go to jail? Because it is highly likely that a guilty person would commit a similar crime again. Which is what happened in this case. It does create more victims unfortunately, but it also removes a lot of doubt.
And if they were guilty, and they don't commit another crime - then at least they have been rehabilitated for whatever reason they chose (feeling bad, fear, etc).