why they didn't stop and leave stage to settle things we will never know
For quite possibly the same reason the police decided it was best to continue the event instead of calling the entire day off - the riot's/fallout that would've occured from a cancelled band and/or event would've further exacerbated the situation to a MUCH greater degree. It may have been many years prior, but Guns N Roses have had quite a few riots in the past from them ending gigs and/or not showing - the famous one being in 1991. Had they walked off stage (even with good reason) in 1988 infront of an already unruly 109,000 strong crowd can you imagine the fallout they would get for that? They would be classed as in the wrong no matter their decision. The police chose to continue the gig for those reasons, and unsuprisingly so did GnR. It's quite possible even that (although I don't think so) some of the incidents in the years since then have been because Axl decided to leave instead of risk a repeat - and the result was worse.
Re: Getting people off stage back into the crowd instead of ushering off, the Lamb of God vocalist is facing manslaughter charges for trying to get a fan off stage. Maybe in both cases it wasn't handled in the best manner, and that's what security are for after all, but there is good reason that you don't see the whole fans climbing on stage and diving off that you used to get in the old video's. One is probably the gap between the stage and barrier at many venues (although a case of chicken and the egg) the other is security/risk of them being there themselves. There could be any number of risks of having a person on stage, and in the world that we live in now people would take any opportunity possible to sue if not worse. Yes, they can wait for security to come and usher them off stage - but there was a famous incident in 2004 (?) where Dimebag was shot by a fan on stage. Yes, ushering off instead of 'pushing back into the crowd' is the safer way to deal with it but that also takes a much longer time to deal with, and that time is all that's needed for injury and/or equipment damage which can be prevented with quicker action. Hindsight is wonderful but you don't have the knowledge of who is on stage with you at the time. Had the reaction to that fan at Damageplan's gig been to simply push him back off stage then it MAY (depending on the 'fans' reaction time >.>) have been prevented, and at the end of the day I'm pretty sure it's common sense to most people, and probably a rule, DON'T CLIMB ON THE STAGE. So anyone on stage imho is understandably treated as security risk and wanted to be dealt with as soon as possible. I'm aware all this is POST 1988 but the same principles probably applied back then.
Not understanding the guy was security, that is an issue though in that they should be well marked.
The lamb of god vocalist chose to take the quicker resolution for his own safety and is now facing charges for it. Even had the fan not died there are many people out there who would love to sue for him taking action. But had he not taken action, it could've been another dimebag incident in the making, you just don't know! Maybe these are extreme cases but that's just it, you don't know until it's too late. Better safe than sorry. Quite simply no matter what happens there will always be a "they acted wrong" complaint.
Anyway, slight sidetrack there - back to 1988 itself, in more detail.
Incident #1 - The collapse of a screen, the security crew attempted to clear the area and make it safe but were HINDERED BY THE FANS. This put themselves and the crew in danger as of course to get the fans to shift the crew had to stand under the unsupported rig as well. It wasn't until they cut the power to the screen that the crowd started to shift and they could begin to deal with it, but this took over an hour during which time Helloween finished their set and GnR began to play (as there was no instruction to not continue with the bill).
Incident #2 - Crowd surges across the front of the stage to approx 15 rows back, caused a crowd collapse of up to 50 people. Axl Rose was advised to stop the set, which he did, and told the crowd WHY they were stopping. The security team in the crowd who went to deal with it could not communicate further messages because while attempting to retrieve fans from the floor the radio's had been knocked and unhooked. The band saw the fans getting extracted to the front of the pit and assumed it was resolved so continued - whilst the issue was not entirely dealt with, as far as the security team's - both in and out of the crowd knew
*** - all people had been extracted. You could say that GnR should've waited for them to get the all clear but from their viewpoint it looked to be resolved and they were under contract to keep the show on time. Crowd surges continued engulfing another 30 or so people and the security team - that could be blamed on GnR's continuation of the set, sure. However even after already witnessing the set being stopped because of crowd collapse, and seeing people extracted, the fans who saw this second collapse rather than ceasing... climbed ONTO the collapsed people in an attempt to get further forward.
Now I'm sorry, but not only would I notice if I was accidentally stood on someone at a gig but DELIBERATELY climbing onto a load of collapsed people? Whilst the surge could be blamed on the band that particular thing is entirely the fans and their complete disregard for the safety of themselves and others at the event.
The security detail outside of the crowd and on-stage noticed this second affair and how serious it was becoming (hard not to notice people climbing ontop of the crowd...) and the show was stopped again at request. The fan area was cornered off and extraction began once again. 30 people were extracted via a route they had sectioned off and taken to the ambulance. One person at the bottom of the pile was found unconscious but resuscitated - again, imho that is blameable squarely on the fans. Whether the band should've been playing or not is besides the point, you don't climb ontop of people creating a f**king PILE of people, especially not in the weather conditions that were present.
It wasn't until these had all been extracted that they found the last 2 people, who had been there since the first collapse. I marked a sentence with *** above, here's where it relates. The security personnel did NOT KNOW THEY WERE PEOPLE because they buried in 4 inches of mud and entirely covered, they had to be physically dug out from the ground. So, the statement of the band continued to play because as far as they could tell the situation had been resolved - as far as the security personnel IN THE CROWD knew it had been resolved aswell, because they literally had no idea those 2 people were down there.
Incident #3 - David Lee Roth. The security member in question climbed out of the crowd and onto the stage, and was
ushered off by DLR's personnel security because he thought he was in danger. When the crowd saw someone climbing onto the stage and being taken off, they surged again. The attempt to stop the show this time was because someone had fainted in the crowd and the security were having difficulty extracting her. The person trying to extract her (a security offiicial in the marked gear) was attacked physically by members of the crowd with bottles and other such things - despite clearly carrying an unconscious person.
Ultimately, whilst the band's decision to begin playing again was a bad one - the security teams attempted to do everything correctly, and it was the crowd that was at fault. Climbing ontop of each other and attacking security personnel is inexcusable. It is no wonder that Bruce stops Maiden shows every time he see's a crowd surge and/or mosh pit.