I'm not sure if I remember the situation correctly.
Basically, the military started handing down their surpluss hardware to large and small local police forces throughout the US. Since having your own SWAT team is incredibly cool, everyone got in on the action and began building up their units. Now they have those heavily armed, tactically trained, well payed officers sitting around and the only way that the unit going to pay for itself is by getting used. So they use it. A lot.
Is that about right?
That sounds about right. I was under the impression that military hardware was given to non-SWAT units as well, but I seem to have been mistaken.
NY Times wrote an article on it last year. Basically it seems as if police departments can ask the military for surplus hardware which will be destroyed if it goes unclaimed, so there's really no reason to say no to (essentially) free, cool, military gear.
Some restrictions seem to have been introduced in May though (Reuters), so hopefully things might start changing for the better.