No one relishes the use of coercion to deal with problems like disorder, whether the coercion is exercised by police or by anyone else. Institutionalizing the mentally ill and many of the other alternatives to order maintenance policing that you describe in your second paragraph obviously raise their own civil liberties concerns, as you clearly acknowledge. (Michel Foucault… recognized these dangers as clearly as anyone, as have those he inspired.) One advantage of police order maintenance is that no one can fail to recognize that it is coercive.That's a clever argument, but very, very dubious. David Cole's No Equal Justice makes a good case that those who have the luxury of debating the justice system have in fact been very, very good at "kid[ding] ourselves" about disparities in the system—especially since the many double standards in law enforcement "allow the privileged to enjoy constitutional protections from police power without paying the costs associated with extending those protections across the board to minorities and the poor." It's allowed people to avoid "tough questions" about the tradeoff between liberty and security. Plus, voters seem to be especially irrational about crime control in a way they aren't about many other things. In no other policy field, it seems, are the experts who know how to control crime, deal with drug use, reduce incarceration rates, etc., so thoroughly ignored. It's true that the subtle coercion inherent in other social policies is often ignored, but to say that law enforcement policy "puts us on our guard" seems wrong.
Therapeutic solutions like institutionalization make it dangerously easy to jump too quickly to the claim that "it's for their own good," but it's harder to kid ourselves that way about police order maintenance. It puts us on our guard. It forces us, hopefully, to recognize the need to face the tough questions you rightfully asked yesterday: Do we really have good reason to intervene against this disorder? Is this really wrongful conduct? Or are we just being finicky, intolerant—even racist?