They were overwhelmed and, again, had been ordered out of many areas for their own safety (hence the Korean shop owners were forced to use deadly force to defend their businesses, homes and lives because there were no police around to do so). Amazingly enough, once thousands of National Guardsman armed with assault weapons arrived the riots very quickly ceased without the need for anyone to be shot; South Central might've been prepared to take out the po-po, but they knew the US Army would shred them if confronted.

The bottom line, once again, is that they call it "martial law" for a reason; people can be shot for a whole lot of things that wouldn't aren't capital crimes outside of a riot zone. That's why governments don't use it except in the most extreme need; whether that need exists here is ultimately the local governments decision, but if it does martial law is just that, and exists for a reason.