My jaded opinion is that Flock's mistake was marketing to police departments. In matters of criminal law the accused has these pesky things called "rights". The police have long violated those rights so there are reams upon reams of precedent reinforcing people's rights.

The accused has comparatively no rights when an bureaucrat is shaking them down and the accused is often a business rather than an individual it's easy to have sympathy for. Flock could've run their racket for many years, got much praise from the useful idiots, really gotten their system integrated and entrenched, if they'd have chosen that route.

Their mistake was believing in their own bullshit. They thought they could make it cheaper to solve crimes (at great cost to everyone's rights of course, but they thought this was acceptable) and make things better (or at least their definition of it). If only they had been slightly scummier and instead set out to help municipalities collect civil fines they probably could have gotten away without scrutiny.