The cops showed up because the store owner had called in a complaint. He should have obeyed their commands. They simply would have written an appearance ticket. He could have gone to court and pleaded his case. Cops can arrest you or write you a ticket for anything. It doesn't matter because you have the right to go to court. I've gotten parking tickets thrown out because the cop was wrong.
Is the system perfect? no. Are cops perfect? no. But until you come up with a better solution, it's the best we have.