So if I understand the totality of the situation here: mans donates cameras from company he invested in, gets tax break for doing so, helps portfolio co, furthers own self-interest and propels us towards surveillance state?

Did I miss anything?

The only thing you may have missed is that YCombinator is also an investor in Flock.

I think the money is a red herring here. ALPR firms can come up with any number of different pilot/licensing/financing programs to keep deployments under purchasing thresholds for police departments.

The issue is that Las Vegas, like most major metros, doesn't appear to have ordinances preventing their police department from deploying cameras without the consent of the city council. That's fixable! There's model ordinances for this.