Presumably the police did feel that there was enough evidence though if the Crown Prosecution Service were considering the matter.
No, it just means that they (the police) wanted certain people convicted. Happily, an independent prosecuting authority means that miscarriages of justice and cases collapsing due to lack of credible evidence (and this one would certainly have been the latter) are rarer than used to be the case.
Saying that, some elements of the way the investigation was handled were (to me at least) pretty disturbing; made worse by the claims that the police "usually" do things that way.