I found this interesting article by Bruce Schneier, security expert, explaining why shoot to kill doesn't work:

This policy is based on the extremely short-sighted assumption that a terrorist needs to push buttons to make a bomb explode. In fact, ever since World War I, the most common type of bomb carried by a person has been the hand grenade. It is entirely conceivable, especially when a shoot-to-kill policy is known to be in effect, that suicide bombers will use the same kind of dead-man's trigger on their bombs: a detonate that is activated when a button is released, rather than when it is pushed.