Firing with blanks requirs a restrictor in the barrel to cycle the weapon. These have to be removed in order to fire live ammo. This might not be so ... "convenient" in a SHTF situation. In addition the perp might realize there were no bullet strikes.
How noticeable would bullet strikes on a concrete wall be compared to an AR rapid firing from across a residential street? From the description, he wouldn't have been able to see the impact area anyway.
Gas grenade sounds viable unless there's someone inside with asthma or other respiratory problems.
If not known, then it's a more acceptable risk than live rifle ammo in a residential area, IMO. If known, then it's down to a case-by-case call.
Don't forget, Gas grenades seem to have a tendency to burn down whatever building they are fired into.
Then have Pepperballs as a closer range option. How much can it possibly cost to add these to a SWAT team's vehicle loadout? $150/officer, assuming they don't already have their own paintball guns? For that matter, aren't there some ranges with what amounts to a tank drone doing paintball shootback? Load it up with Pepperballs, and it sounds like a great little robot to have any time there's a threat that isn't armored, and a heck of a lot cheaper than heavy duty military hardware. (Looks like they also offer a solid nylon ball specifically intended to break residential windows, so you could even have a few of those up front in the robot's load.)
