Guilty until proven otherwise
"The problem is that it identifies everyone in the area, not just the suspects."
And of course, they think everyone is guilty until proven otherwise. So, just in case, they keep the infomation stolen from your devices, listen to your conversations, see your pictures, read your documents, etc.
"The device not only grabs identification data, but can also interrupt service, jam calls, and even snag data, such as photos and documents, from the phones in question."
I believe this is intolerable. Who have them the right to snoop into everyone's phones? How many criminals, terrorists, suspects of murder they have found? Is spying everyone justifiable? I don't think so. The rates of crime in the US remains one of the highest on the world's crime and violence rate lists.
Unites States Population and Number of Crimes 1960 - 2013: See: disastercenter.com/crime/uscrime.htm