Maybe if I gave a different perspective:
You have driven to a meeting downtown. You park on the street in front of the building you need to go to. When you come out, your car is gone. You contact the police, who tell you that car theft isn't really on their radar so they won't look for your bike and you're SOL. Later you find out that the building you parked in front of has been impounding cars from the street without notice for years.
Can you provide a single good reason for a person to cut the lock of a bike that's not on their property, then keep the bike? Remember that in Toronto it is completely legal to chain up to streetposts, signs, whatever since there's so little readily available bike parking. Even if the bike were locked up illegally (it wasn't), the police are the ones who are in charge of removing it. Compound this with the fact that they've been doing this for YEARS now, and there's pretty good reason to be jumping all over the Hudson's Bay for their actions.