Just miscommunication man, everyone's got it half right.
I don't want to pretend like I wouldn't be ready to beat the shit out of somebody if my child got torn up like that (especially if the police know jack shit) but you're letting a small toddler play with a strange dog unsupervised. It's her fault, period. The police still shoudl have filed a report under due process for the dog to be evaluated. The neighbor also was clearly hostile and was not ready to 'immediately hand the dog over' until they realized cameras were involved (way to go CNN for making it all look like the police's fault).