I'm pretty sure the AR-15s are replacing the shotguns most cops usually carry in their squad cars. AR-15s with M193 rounds are a better choice any day, they don't overpenetrate, they're accurate, and they're a hell of a manstopper. Not to mention that aimed fire (ranged or otherwise) will produced significantly lower collateral damage than shotgun shells. I don't know about you but a bunch of cops are going to shoot it out with BGs in an urban area I'd rather they use AR-15s instead of shotguns and handguns. You hear about handgun rounds penetrating houses and killing people all the time.
And as far as the law, I believe they are exempt from the "assault weapons ban" (hence the LEO-only mags and rifles with flast suppressors, etc) but they still need approval for full-auto weapons, all only that can be used in the execution of their duties (IE they can't own these weapons). Typically only SWAT are approved for such things.